Review of ATF's Project Gunrunner by pengxiang

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									U.S. Department of Justice
Office of the Inspector General
Evaluation and Inspections Division




                            Review of
                     ATF’s Project Gunrunner

                                 November 2010




                                      I-2011-001 

                              EXECUTIVE SUMMARY 



      This review by the Department of Justice (Department) Office of the
Inspector General (OIG) examined the impact of the Bureau of Alcohol,
Tobacco, Firearms and Explosives’ (ATF) implementation of Project
Gunrunner on the illicit trafficking of guns from the United States to
Mexico.

       Violence associated with organized crime and drug trafficking in
Mexico is widespread, resulting in tens of thousands of deaths. In part
because Mexican law severely restricts gun ownership, drug traffickers have
turned to the United States as a primary source of weapons, and these drug
traffickers routinely smuggle guns from the United States into Mexico. The
criminal organizations responsible for smuggling guns to Mexico are
typically also involved in other criminal enterprises, such as drug
trafficking, human trafficking, and cash smuggling. This requires ATF to
work with other federal entities, as well as with state and local law
enforcement partners, in sharing intelligence, coordinating law enforcement
activities, and building cases that can be prosecuted.

      To help combat firearms trafficking into Mexico, ATF began Project
Gunrunner as a pilot project in Laredo, Texas, in 2005 and expanded it as a
national initiative in 2006. Project Gunrunner is also part of the
Department’s broader Southwest Border Initiative, which seeks to reduce
cross-border drug and firearms trafficking and the high level of violence
associated with these activities on both sides of the border.

        In June 2007, ATF published a strategy document, Southwest Border
Initiative: Project Gunrunner (Gunrunner strategy), outlining four key
components to Project Gunrunner: the expansion of gun tracing in Mexico,
international coordination, domestic activities, and intelligence. In
implementing Project Gunrunner, ATF has focused resources in its four
Southwest border field divisions. In addition, ATF has made firearms
trafficking to Mexico a top ATF priority nationwide.

       The OIG conducted this review to evaluate the effectiveness of ATF’s
implementation of Project Gunrunner. Our review examined ATF’s
enforcement and regulatory programs related to the Southwest border and
Mexico, ATF’s effectiveness in developing and sharing firearms trafficking
intelligence and information, the number and prosecutorial outcomes of
ATF’s Project Gunrunner investigations, ATF’s coordination with U.S. and
Mexican law enforcement partners, ATF’s traces of Mexican “crime guns,”

U.S. Department of Justice                                                  i
Office of the Inspector General
Evaluation and Inspections Division
and challenges that ATF faces in coordinating efforts to combat firearms
trafficking with Mexico.1

RESULTS OF THE OIG REVIEW

ATF’s Expanded Efforts in Support of Project Gunrunner

       To assess the impact of Project Gunrunner, we first examined data on
ATF’s performance in tracing guns, conducting criminal investigations,
conducting compliance inspections of gun dealers in the region, and
referring leads to ATF’s criminal enforcement personnel for action. We
compared data in these areas from fiscal year (FY) 2004 through FY 2006
(3 years prior to ATF’s implementation of Project Gunrunner), with data
from FY 2007 through FY 2009 (the initial 3 full years of Project
Gunrunner).

     The data showed that since ATF’s implementation of Project
Gunrunner, ATF has increased its:

       1. Traces of seized firearms from Mexico and from the Southwest
          border – Trace requests initiated in Mexico rose from 1 percent of
          all Mexico and U.S. trace requests prior to Project Gunrunner to
          8 percent during Project Gunrunner.

       2. Project Gunrunner cases initiated, cases referred for prosecution to
          U.S. Attorneys’ Offices (USAO), and defendants referred for
          prosecution for firearms trafficking-related offenses – ATF
          increased the number of Project Gunrunner cases it initiated by
          109 percent and increased the number of those cases it referred to
          USAOs by 54 percent.2 The number of defendants ATF referred for
          prosecution increased by 37 percent.



        1 According to ATF, crime guns are guns that were “recovered by law enforcement

that were used in a crime, were suspected to have been used in a crime, or were recovered
in relation to a crime.” Mark Kraft, “Firearms Trafficking 101 or Where Do Crime Guns
Come From?,” United States Attorneys’ Bulletin (January 2002).

       2    ATF considers any investigation conducted nationwide to be a “Project Gunrunner
case” if it involves firearms trafficking or violent crime and has a connection to the
Southwest border. This could include cases also coded as gang-related or as another type
of case. Our discussion of Project Gunrunner cases in this report is based on ATF data
that meets this definition.



U.S. Department of Justice                                                              ii
Office of the Inspector General
Evaluation and Inspections Division
       3. Gun dealer compliance inspections conducted on the Southwest
          border, inspection hours worked by Southwest border field division
          inspectors, and inspection finding referrals made to ATF’s criminal
          enforcement personnel for subsequent action – ATF increased the
          number of gun dealer compliance inspections along the Southwest
          Border by 133 percent and increased the number of compliance
          inspection hours worked by 102 percent. The total number of
          referrals ATF Industry Operations personnel made to ATF criminal
          enforcement personnel increased by 47 percent.

      In addition to its increased program activities described above, ATF
implemented a Gunrunner Impact Team initiative that increased the
number of gun dealer compliance inspections conducted and cases initiated
within the Houston Field Division area. Under this initiative, ATF deployed
100 agents, investigators, and support staff to the Houston Field Division
for 120 days. ATF reported that the team conducted over 1,000 inspections
of gun dealers and generated investigative leads leading to the seizure of
over 400 firearms.

      Despite the increased ATF activity associated with Project Gunrunner,
we found that significant weaknesses in ATF’s implementation of Project
Gunrunner undermine its effectiveness.

ATF Firearms Trafficking Intelligence and Information

       We found that ATF does not systematically and consistently exchange
intelligence with its Mexican and some U.S. partner agencies. In addition,
some ATF field agents reported that they do not find investigative leads
provided to them by ATF’s Field Intelligence Groups to be timely and usable.
We also determined that intelligence personnel in ATF’s Southwest border
field divisions do not routinely share firearms trafficking intelligence with
each other. ATF could better implement its Border Liaison Program to
improve information sharing and coordination between its U.S. and its
Mexico personnel.

       The success of Project Gunrunner depends, in part, on ATF’s sharing
intelligence with its Mexican and U.S. partner agencies, including the Drug
Enforcement Administration (DEA) and the Department of Homeland
Security’s (DHS) Immigration and Customs Enforcement (ICE). Although
ATF has shared some strategic intelligence products with each of its partner
agencies, it is not doing so systematically and consistently. ATF does share




U.S. Department of Justice                                               iii
Office of the Inspector General
Evaluation and Inspections Division
tactical intelligence regularly with the DEA and DHS’s Customs and Border
Protection (CBP).3 However, ATF has not provided Mexican law enforcement
with intelligence it requested on firearms trafficking patterns and trends,
including trafficking routes and distribution points where guns are crossing
into Mexico.

      We also found that while reports of multiple sales of handguns
produce timely, actionable investigative leads for ATF, the lack of a reporting
requirement for multiple sales of long guns – which have become the cartels’
weapons of choice – hinders ATF’s ability to disrupt the flow of illegal
weapons into Mexico.

       In addition, when ATF obtains or generates intelligence, its Southwest
border field divisions’ intelligence structure is not consistently using that
information to provide effective investigative leads for field agents to pursue.
Specifically, the Field Intelligence Groups of ATF’s Southwest border field
divisions are not forwarding leads that are timely, that are developed beyond
what field agents state they can do themselves or that contribute to
investigations. Intelligence personnel in the Southwest border field
divisions also lack a common understanding of how to develop and screen
intelligence accurately to meet the requirements of enforcement groups.
They do not operate under consistent guidelines or clear criteria that specify
the most useful types of investigative leads. Additionally, ATF managers
must rely on two separate ATF case management systems and do not have
an automated process to track the status, monitor the outcomes, or
evaluate the effectiveness of investigative leads provided to agents.

       We also found no routine sharing of firearms trafficking-related
information and techniques between ATF intelligence personnel in
Southwest border locations and in the ATF Mexico Country Office.
Intelligence coordination, when it does happen, occurs at the supervisory
level, but non-supervisory intelligence personnel lack a method to regularly
share information, best practices, and analytical techniques that they told
us would be useful to them.

     One illustration of the lack of information sharing is ATF’s weak
implementation of its Border Liaison Program. ATF’s 2007 Gunrunner

       3   ATF defines tactical intelligence as information produced to support operations or
that relates to the specific time, date, nature, and other details of events. Strategic
intelligence is defined as information required for the formulation of policy and plans at the
regional, national, and international levels. Strategic intelligence differs primarily from
tactical intelligence in level of use but may also vary in scope and detail.



U.S. Department of Justice                                                                iv
Office of the Inspector General
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strategy identifies ATF’s border liaisons as “the front line” of Project
Gunrunner. However, we found that the border liaisons’ roles are not well
defined and their activities in Mexico are not well coordinated.

ATF Investigative Focus

       Firearms traffickers also participate in other criminal activity, such as
drug trafficking, human trafficking, and cash smuggling. The complexity of
their operations requires ATF to work closely with the government of Mexico,
other U.S. federal agencies and departments, and state and local law
enforcement partners.

      Yet, we found weaknesses in how ATF implemented Project
Gunrunner as a multi-agency effort. Although, as noted above, ATF has
increased some program activities during Project Gunrunner, ATF’s focus
remains largely on inspections of gun dealers and investigations of straw
purchasers, rather than on higher-level traffickers, smugglers, and the
ultimate recipients of the trafficked guns.4

       For example, we found that 68 percent of Project Gunrunner cases
are single-defendant cases, and some ATF managers discourage field
personnel from conducting the types of complex conspiracy investigations
that target higher-level members of trafficking rings. Federal prosecutors
told us that directing the efforts of Project Gunrunner toward building
larger, multi-defendant conspiracy cases would better disrupt trafficking
organizations.

      Moreover, although ATF has had a long-stated intent to make fuller
use of the resources of the Department’s Organized Crime Drug
Enforcement Task Force (OCDETF) Program to conduct more complex
conspiracy investigations, it has not done so. This is in part due to ATF’s
focus on conducting fast investigations and also due to misunderstandings
among ATF field personnel about what kinds of cases are eligible for
OCDETF and whether OCDETF cases are counted as Project Gunrunner
cases by ATF’s internal performance metrics.

       4  According to ATF, a “straw purchase” occurs when the actual buyer of a firearm
uses another person, “the straw purchaser,” to execute the paperwork necessary to
purchase a firearm from a gun dealer. The actual buyer is often prohibited from
purchasing the gun. The straw purchaser violates federal law by making a false statement
with respect to the information required to be kept in the gun dealer’s records. According
to ATF, straw purchasing is one of the most frequent methods used to illegally acquire
guns.



U.S. Department of Justice                                                              v
Office of the Inspector General
Evaluation and Inspections Division
      Because there is no federal firearms trafficking statute, ATF must use
a wide variety of other statutes to combat firearms trafficking. However,
cases brought under these statutes are difficult to prove and do not carry
stringent penalties – particularly for straw purchasers of guns. As a result,
we found that USAOs are less likely to accept and prosecute Project
Gunrunner cases. And when these cases are prosecuted and convictions
obtained, Federal Sentencing Guidelines categorize straw-purchasing­
related offenses as lesser crimes.

Multi-Agency Coordination Issues

       We also found that ATF and ICE do not work together effectively on
investigations of firearms trafficking to Mexico, and therefore ATF’s Project
Gunrunner cases do not benefit from ICE’s intelligence and prosecutorial
options. ATF and ICE rarely conduct joint investigations of firearms
trafficking to Mexico, do not consistently notify each other of their firearms
trafficking cases, and do not consistently coordinate their investigative work
with each other.

        A memorandum of understanding (MOU) signed by ATF and ICE in
2009 sought to foster better coordination, but we found that ATF and ICE
agents and supervisors misunderstood the intent of the MOU or were
unaware of it. Consequently, adequate coordination between ATF and ICE
is still lacking in those areas of concurrent jurisdiction that are described in
the MOU.

Mexican Crime Gun Tracing

      Despite the increased activity related to Project Gunrunner, ATF is not
using intelligence effectively to identify and target firearms trafficking
organizations operating along the Southwest border and in Mexico.
Moreover, ATF’s expansion of its automated system (eTrace) to trace guns
seized in Mexico has yielded very limited information of intelligence value.

      According to ATF’s June 2007 Gunrunner strategy, tracing guns
seized in Mexico is the “cornerstone” of Project Gunrunner. Tracing seized
guns to the gun dealer which sold the gun to the first retail purchaser is a
crucial source of information in ATF’s investigations of firearms trafficking.
Gun tracing also helps ATF identify firearm traffickers operating in the
United States and in Mexico and can provide intelligence in the form of
patterns and trends in gun smuggling.




U.S. Department of Justice                                                   vi
Office of the Inspector General
Evaluation and Inspections Division
       However, ATF has been unable to expand gun tracing throughout
Mexico. A June 2009 Government Accountability Office report estimated
that trace data was submitted to ATF on less than a quarter of the guns
seized in Mexico. Further, most trace requests that are submitted to ATF
from Mexico are considered “unsuccessful” because of missing or improperly
entered gun data.5 Although ATF has provided Mexican law enforcement
with training in firearms identification, we found the percentage of total
trace requests that succeed has declined since the start of Project
Gunrunner. Moreover, few of the traces that do succeed generate usable
investigative leads because guns submitted for tracing often were seized by
Mexican officials years before the trace requests were submitted. In such
cases, the time at which a gun was transferred illegally may be outside the
statute of limitations and charges cannot be brought against those
responsible.

       We determined that Mexican law enforcement authorities do not view
gun tracing as an important investigative tool for them. One reason for this
is that ATF’s trace results do not include the detailed investigative
information on U.S. citizens that Mexican officials have requested (such as
the criminal histories of those who may be involved in firearms trafficking).
This information must be requested separately from the trace results. Some
ATF officials also told us that ATF has not adequately communicated the
value of gun tracing to Mexican officials. Consequently, Mexican law
enforcement officials view gun tracing as merely a tool that ATF uses to
further its own investigations. The Mexican officials did not see the long-
term benefits of gun tracing in reducing the flow of illegal guns to Mexico by
targeting the sources of these guns and the organizations that traffic them
on both sides of the U.S.-Mexico border.



        5 ATF stated that its common definition of a “successful trace” is a trace that

provides any additional historical or identifying information concerning the firearm beyond
the original information submitted in the trace request. However, ATF staff provided us
different definitions of a successful trace, such as one that identifies the first purchaser.
We define a successful trace as one that identifies the gun dealer who originally sold the
weapon because that is the minimum result that can provide ATF with usable intelligence
information.

       According to ATF National Tracing Center data, an invalid serial number was the
most common reason for unsuccessful traces from Mexico. However, crime gun traces can
be unsuccessful for many other reasons. For example, the requester may not have
provided a manufacturer or importer, or the gun may have been manufactured prior to
1968 when the Gun Control Act was enacted and thus no records were required.



U.S. Department of Justice                                                               vii
Office of the Inspector General
Evaluation and Inspections Division
ATF Coordination Challenges in Mexico

Resource and Coordination Difficulties

       Our review found that because of a lack of resources, ATF has been
unable to fully meet Mexican government needs for support under Project
Gunrunner. For example, ATF has been unable to provide key training and
support requested by the government of Mexico. Further, the process of
exchanging law enforcement investigative information between ATF and the
government of Mexico is cumbersome, and ATF has a substantial backlog in
responding to requests for information from Mexican authorities, which has
hindered coordination between ATF and Mexican law enforcement. ATF also
has been unable to recruit sufficient qualified staff to fill positions in the
Mexico Country Office and does not offer incentives to attract and retain
qualified staff there.

      U.S. officials told us they face multiple unique challenges in
coordinating with Mexican law enforcement officials. For example,
U.S. officials we interviewed in Mexico stated that there is a lack of
coordination among various Mexican law enforcement agencies and that
ATF has no single counterpart that it can interact with in coordinating
firearms trafficking investigations. Internal coordination problems within
the government of Mexico require that ATF deal separately with multiple
agencies there, which has slowed information sharing. ATF’s effort to
improve coordination by embedding a representative of the Mexico Attorney
General’s office in ATF’s Phoenix Field Division on a trial basis has improved
ATF’s access to Mexican law enforcement’s information.

Lack of an Integrated Project Gunrunner Approach

       An overarching problem our review found was that ATF has not
integrated the Project Gunrunner activities of its four Southwest border
divisions and ATF’s Mexico Country Office into a coordinated approach.
ATF’s Project Gunrunner strategies and plans do not effectively address
coordination, joint operations and investigations, or information sharing
across these units. We believe this has been a contributing factor in several
other shortfalls addressed in this review, including the ineffective
intelligence and information sharing within ATF, unclear roles for border
liaison personnel, inadequate and disparate staffing in Mexico, failure to
focus on complex conspiracy firearms trafficking investigations, and poor
coordination with other U.S. and Mexican law enforcement agencies.




U.S. Department of Justice                                               viii
Office of the Inspector General
Evaluation and Inspections Division
      In September 2010, after our draft report was issued, ATF
disseminated to field personnel and International Affairs Office staff a
strategy, entitled “Project Gunrunner – A Cartel Focused Strategy,” that
responds to many of the issues identified in this report. We refer to this
strategy at various places in this report. However, it is not clear when, or
how, this strategy will be fully implemented.

Recommendations

        In this report, we make 15 recommendations to ATF to help improve
its efforts in combating firearms trafficking from the United States to
Mexico. For example, we recommend that ATF improve its generation of
investigative leads to agents working on Project Gunrunner and improve its
intelligence sharing within ATF and with its U.S. and Mexican partners, and
that ATF focus on more complex conspiracy cases to dismantle firearms
trafficking rings. To improve coordination between ATF and ICE, we
recommend that ATF provide specific guidance to require better
coordination with ICE in accordance with the agencies’ memorandum of
understanding. We also recommend that ATF work with Mexican law
enforcement officials to determine the causes of unsuccessful Mexican crime
gun traces and to improve the rate of successful traces. We also
recommend that ATF consider implementing incentives to attract qualified
staff to its Mexico Country Office. In addition, to provide a coordinated
approach to ATF’s implementation of Project Gunrunner, we recommend
that ATF implement a plan to integrate the activities of the Mexico Country
Office and Southwest Border field divisions.




U.S. Department of Justice                                                 ix
Office of the Inspector General
Evaluation and Inspections Division
U.S. Department of Justice
Office of the Inspector General
Evaluation and Inspections Division
                                    TABLE OF CONTENTS 




 Background .........................................................................................1

                                                                                                       

 Purpose, Scope, and Methodology of the OIG Review ..........................19

                                                                                

 Part I: ATF’s Expanded Efforts in Support of Project Gunrunner........22

                                                                          

 Part II: ATF Firearms Trafficking Intelligence and Information ...........28

                                                                              

 Part III: ATF Investigative Focus ........................................................51

                                                                                              

 Part IV: Multi-Agency Coordination Issues ........................................67

                                                                                      

 Part V: Mexican Crime Gun Tracing ..................................................73

                                                                                        

 Part VI: ATF Challenges in Coordinating in Mexico ............................81

                                                                                  

 Conclusion and Recommendations.....................................................93

                                                                                       

 Appendix I: Timeline of Key Project Gunrunner Events ......................96

                                                                               

 Appendix II: Position Descriptions for ATF Staff.................................97

                                                                                     

 Appendix III: Interviews.....................................................................99

                                                                                                 

 Appendix IV: ATF Southwest Border Field Divisions’ Firearms 

     Trafficking Implementation Plans ................................................102

                                                                                          

 Appendix V: The Bureau of Alcohol, Tobacco, Firearms and 

     Explosives’ Amended Response ...................................................103

                                                                                         

 Appendix VI: OIG Analysis of the Bureau of Alcohol, Tobacco, 

     Firearms and Explosives’ Response .............................................118

                                                                                        




U.S. Department of Justice
Office of the Inspector General
Evaluation and Inspections Division
U.S. Department of Justice
Office of the Inspector General
Evaluation and Inspections Division
                                      BACKGROUND 



Introduction

       Mexican drug trafficking organizations (cartels) are a significant
organized crime threat, both to the United States and in Mexico. According
to the Department of Justice’s (Department) 2010 National Drug Threat
Assessment, Mexican cartels present the single greatest drug trafficking
threat to the United States and are active in every region of the
United States. Mexican cartels use violence to control lucrative drug
trafficking corridors along the Southwest border, through which drugs flow
north into the United States, while guns and cash flow south to Mexico.6

      From December 2006 through July 2010, the Mexican government
reported almost 30,000 deaths in Mexico resulting from organized crime and
drug trafficking, with 9,635 murders in 2009 alone. In its fiscal year (FY)
2010 to FY 2016 strategic plan, the Bureau of Alcohol, Tobacco, Firearms
and Explosives (ATF) reported that Mexico’s drug traffickers have turned
aggressively to the United States as a source of guns and routinely smuggle
guns from the United States into Mexico. This is, in part, because Mexican
law severely restricts gun ownership.

      In 2009, ATF reported to Congress that about 90 percent of the guns
recovered in Mexico that ATF has traced were initially sold in the
United States.7 The Southwest border states – Texas, California, Arizona,
and to a lesser extent, New Mexico – are primary sources of guns used by
Mexican drug cartels. The growing crime rate in Mexico, and fears that the
violence will spill over into the United States, have led to efforts by U.S. and
Mexican authorities to attempt to curb firearms trafficking.




       6Congressional Research Service, Mexico’s Drug-Related Violence, CRS Report
R40582 (May 27, 2009).

       7   William McMahon, Deputy Assistant Director for Field Operations, ATF, before the
Committee on Homeland Security Subcommittee on Border, Maritime, and Global
Counterterrorism, U.S. House of Representatives, concerning “Combating Border Violence:
The Role of Interagency Coordination in Investigations” (July 16, 2009),
homeland.house.gov/Hearings/index.asp?ID=205 (accessed August 25, 2010). However, in
September 2010, in response to a draft of this report ATF told the OIG that the 90-percent
figure cited to Congress could be misleading because it applied only to the small portion of
Mexican crime guns that are traced. ATF could not provide updated information on the
percentage of traced Mexican crime guns that were sourced to (that is, found to be
manufactured in or imported through) the United States.


U.S. Department of Justice                                                             1
Office of the Inspector General
Evaluation and Inspections Division
       ATF is one of the primary U.S. law enforcement agencies combating
firearms trafficking from the United States to Mexico. ATF enforces federal
firearms laws and also regulates the sale of guns by the firearms industry
under the Gun Control Act of 1968. ATF is the only federal agency
authorized to license and inspect gun dealers to ensure they comply with
laws governing the sale, transfer, possession, and transport of guns.8 ATF
is also responsible for tracing guns by researching manufacturer and gun
dealer data to identify the original purchasers of guns that are subsequently
“recovered by law enforcement that were used in a crime, were suspected to
have been used in a crime, or were recovered in relation to a crime.”9 These
guns are termed “crime guns.”

Project Gunrunner

       Project Gunrunner, ATF’s national initiative to stem firearms
trafficking to Mexico, is part of the Department’s broader Southwest Border
Initiative, which combines the Department’s law enforcement components in
a concerted effort to reduce cross-border drug and weapons trafficking and
the high level of violence associated with these activities. ATF began Project
Gunrunner in 2005 as a pilot project in Laredo, Texas, and expanded it into
a national program in 2006.10

       ATF established five main objectives for Project Gunrunner:

       1. Investigate individuals responsible for illicit firearms trafficking
          along the Southwest border.
       2. Coordinate with U.S. and Mexican law enforcement along the
          border in firearms cases and violent crime.
       3. Train U.S. and Mexican law enforcement officials to identify
          firearms traffickers.
       4. Provide outreach education to gun dealers.
       5. Trace all guns to identify firearms traffickers, trends, patterns, and
          networks.


       8 In this report, the term “gun dealers” refers to federal firearms licensees who are

licensed through ATF to manufacture, import, or deal in guns.

       9 Mark Kraft, “Firearms Trafficking 101 or Where Do Crime Guns Come From?,”

United States Attorneys’ Bulletin (January 2002).

        10 The exact inception date of Project Gunrunner is unclear. According to an

April 28, 2009, ATF news release, Project Gunrunner began in 2005. However, ATF officials
told us that they consider April 2006 the official implementation date of Project Gunrunner.


U.S. Department of Justice                                                              2
Office of the Inspector General
Evaluation and Inspections Division
       ATF’s primary geographic focus for Project Gunrunner is in the four
ATF field divisions that provide coverage for the almost 2,000-mile border
with Mexico. These four field divisions are headquartered in Houston,
Dallas, Phoenix, and Los Angeles.

      The first three of ATF’s five objectives listed above refer directly to
Mexico or to the Southwest border. The remaining two objectives
(Objectives 4 and 5) are more national in scope because the sources of
firearms trafficked to Mexico are nationwide.

       Figure 1 illustrates the Southwest border region as defined by ATF.11

        Figure 1: The Southwest Border Region, as Defined by ATF




            Source: OIG.

        In June 2007, ATF published a strategy document, Southwest Border
Initiative: Project Gunrunner (Gunrunner strategy), which outlined four key
components: the expansion of ATF’s crime gun tracing system (eTrace),
international strategy, domestic strategy, and intelligence. We briefly
describe each of those key components below.

      Expansion of eTrace. ATF emphasized tracing crime guns as the
“cornerstone” of Project Gunrunner and identified the expansion of eTrace
into Mexico as an integral element of the project. The strategy incorporated
ATF’s plan to deploy eTrace in Mexico and established key roles for ATF’s

       11 Although Oklahoma is a part of the Dallas Field Division, it is typically not
considered a part of the Southwest border.


U.S. Department of Justice                                                                3
Office of the Inspector General
Evaluation and Inspections Division
Mexico Country Office, National Tracing Center, and Violent Crime Analysis
Branch in collecting and analyzing trace data from Mexico. We discuss
eTrace further in the section, “Gun Tracing and eTrace,” below.

       International Component. The international component of the
Gunrunner strategy addressed the coordination of ATF’s activities in
Mexico, including with the Department of State and the government of
Mexico, and coordination between ATF’s Mexico Country Office and its
Southwest border divisions. Further, the document defined ATF’s roles in
providing, or helping to provide, technologies, equipment, information, and
training to Mexican federal law enforcement.

      Domestic Component. The domestic component of the strategy
focused ATF resources in its four Southwest border field divisions. The
strategy recognized a broader need to make firearms trafficking associated
with crime guns seized along the Southwest border a top ATF priority
nationwide. Additionally, the strategy document outlined ATF’s approach to
using criminal investigations and regulatory inspections to target the illicit
flow of firearms to the Southwest border and into Mexico. It also directed
the expansion of ATF’s participation in other task force organizations,
internal and external to the Department.

       Intelligence Component. ATF’s strategy document stated that Project
Gunrunner intelligence must be “real time” to be effective, and it described
how intelligence must flow within ATF and to and from its domestic and
Mexican partners. The document also assigned responsibilities within ATF
for oversight and coordination of ATF’s intelligence and information sharing
activities. The strategy established ATF’s Gun Desk at the Drug
Enforcement Administration (DEA) led El Paso Intelligence Center (EPIC) as
ATF’s clearinghouse for intelligence and investigative information.12

       In its FY 2010 to FY 2016 strategic plan, ATF reiterated that Project
Gunrunner is its primary enforcement initiative to stem the trafficking of
illegal weapons across the U.S. border into Mexico and to reduce gun-driven
violence on both sides of the border.13



       12 In addition to the DEA and ATF, 19 other agencies are represented at EPIC,

including the Federal Bureau of Investigation (FBI), Immigration and Customs
Enforcement, Customs and Border Protection, and state and local law enforcement. See
U.S. Department of Justice Office of the Inspector General, Review of the Drug Enforcement
Administration’s El Paso Intelligence Center, Evaluation and Inspections Report I-2010-005
(June 2010), for more information.

       13   Appendix I provides a timeline of key events related to Project Gunrunner.


U.S. Department of Justice                                                               4
Office of the Inspector General
Evaluation and Inspections Division
Project Gunrunner Budget

      Initially, Project Gunrunner had no dedicated funding within ATF’s
budget. ATF funded all of the initiative’s operations out of its general
appropriation. As ATF expanded the initiative in response to the increased
violence in Mexico and concern over firearms trafficking into Mexico, ATF
began seeking dedicated funds for Project Gunrunner, starting with its
FY 2008 budget request. In FY 2009, ATF received $21.9 million to support
and expand Project Gunrunner. This included $5.9 million in ATF’s
FY 2009 appropriation for Project Gunrunner, $10 million in March 2009
from the American Recovery and Reinvestment Act of 2009 (Recovery Act),
and an additional $6 million in June of that year. Under Public Law No.
111-230 (2010), Emergency Border Security Supplemental Appropriations,
ATF received an additional $37.5 million for the continued expansion of
Project Gunrunner in FY 2010.14

Project Gunrunner Staffing

       ATF Staffing on the Southwest Border. The number of ATF staff
dedicated to Project Gunrunner in the four Southwest border field divisions
has increased steadily since FY 2006, but most notably from FY 2008
through FY 2009 (Figure 2).15 In 2006, ATF had 84 Special Agents assigned
to Project Gunrunner. By June 2010, the number had increased
167 percent to 224 agents. The number of Industry Operations
Investigators increased even more sharply, from 15 in 2006 to 165 in 2010,
a 1,000-percent increase. Project Gunrunner staff also includes individuals
in other job categories, such as Intelligence Research Specialists and
Investigative Analysts, depicted in Figure 2 as “other.” As of June 2010, the
number of agents assigned to Project Gunrunner represented 50 percent of
all agents in the four Southwest border field divisions, and the number of
Industry Operations Investigators represented 92 percent of the




       14  Pub. L. No. 111-230 was signed into law on August 13, 2010. The bill provided
$600 million in emergency supplemental appropriations for FY 2010 to secure the
Southwest border and enhance federal border protection, law enforcement, and
counternarcotics activities. The $37.5 million allocated to ATF was part of $196 million
allocated to the Department.

       15  Because Project Gunrunner is a national initiative, additional personnel in
locations beyond the Southwest border work Project Gunrunner cases. For example, a case
involving firearms trafficking to Mexico that originates in the Midwest would be pursued by
ATF agents there under Project Gunrunner.



U.S. Department of Justice                                                           5
Office of the Inspector General
Evaluation and Inspections Division
investigators there.16 Appendix II provides a description of the general
duties for ATF staff.

                Figure 2: Dedicated Project Gunrunner
        Southwest Border Staff in the United States, by Fiscal Year

        450

        400
                                                                     32
        350
                                                        25
        300
                                                                    165
        250
                                                        142
        200

                                                     47
        150

                   15              36                                           224
        100
                                                        187
                                                    148
         50        84              103
          0
                  2006             2007            2008            2009         2010

                  Special Agents         Industry Operations Investigators   Other

         Note: ATF could not provide the numbers of staff in the “other”

         category prior to 2008. 

         Source: ATF data.

      ATF Staffing in Mexico. Project Gunrunner is also supported by ATF’s
Mexico Country Office staff. The ATF Mexico Country Office is headed by an
ATF Attaché and staffed by Assistant Attachés who are agents. At the time
of our site visit in March 2010, the staff also included one Intelligence
Research Specialist, one agent on temporary duty (TDY), and several Foreign
Service Nationals (Mexican nationals employed by ATF). The staff of the
Mexico Country Office coordinates with Mexican law enforcement agencies
and facilitates information sharing; trains Mexican law enforcement
personnel on subjects such as properly identifying and tracing weapons and
conducting firearms trafficking and explosives investigations; and collects




        16 The most recent staffing increases were funded by several sources, including:

(1) the Recovery Act, which provided 37 additional positions; (2) the President’s global war
on terror funding; and (3) ATF’s FY 2009 appropriation. We described ATF’s allocation of
those funds in the report entitled Interim Review of ATF’s Project Gunrunner, Evaluation and
Inspections Report I-2009-006 (September 2009).


U.S. Department of Justice                                                             6
Office of the Inspector General
Evaluation and Inspections Division
information on seized crime guns and explosives, which they forward to ATF
personnel in the United States for investigation.17

       As of June 2010, ATF had 13 staff assigned to the Mexico Country
Office. Seven worked in the U.S. Embassy in Mexico City, and the other six
worked in the U.S. Consulates in Monterrey (three), Tijuana (two), and
Juarez (one).18 Of the 13 staff, 8 were on permanent assignments to
Mexico, and 5 were on TDY.

       In its FY 2010 budget authorization, ATF received funding to increase
the number of staff in Mexico. In September 2010, in response to a draft of
this report, ATF stated that, since we completed fieldwork for this review, it
had added 8 additional positions in Mexico – 3 in Mexico City, 2 each in
Guadalajara and Hermosillo, and 1 in Merida, for a total of 18 authorized
positions in Mexico. However, according to ATF, as of September 2010 only
two of the eight new positions had been filled and recruitment and selection
were under way for the remaining six positions. ATF also noted that even
when it makes selections for personnel in Mexico, those personnel may not
report to Mexico until their positions are “accredited” by the Mexican
Secretariat of Foreign Relations, which had not occurred for the six open
positions. Also, in September 2010 ATF reported that there were eight
Foreign Service Nationals in the Mexico Country Office.

ATF’s Enforcement, Regulatory, and Intelligence Functions

       As described below, Project Gunrunner involves the ATF firearms
trafficking enforcement, regulatory, and intelligence functions. We also
discuss laws governing firearms trafficking and the private sale of guns.

Enforcement Function

      As part of its enforcement function, ATF agents investigate individuals
and organizations that violate U.S. laws by illegally supplying guns to
individuals prohibited from having them.19 ATF refers criminal violations to
United States Attorneys’ Offices (USAO) or to state prosecutors for
prosecution.


       17 ATF and other U.S. law enforcement agencies working in Mexico do not have

authority to conduct investigations there, but they provide assistance and share
information with Mexican agencies and their counterparts in the United States.

       18 All ATF personnel in Mexico are considered part of the Mexico Country Office,

which is organizationally aligned under ATF’s Office of International Affairs.

       19   Categories of prohibited individuals are defined in 18 U.S.C. § 922(g).


U.S. Department of Justice                                                            7
Office of the Inspector General
Evaluation and Inspections Division
      ATF tracks the status of investigations and refers investigative leads
within ATF using its automated case management system, N-Force. Project
Gunrunner cases were not initially identified in N-Force, but after 2006 ATF
created a specific N-Force code for Project Gunrunner cases and directed its
personnel to begin using it.

       ATF considers any investigation conducted nationwide to be a “Project
Gunrunner case” if it involves firearms trafficking or violent crime with a
nexus to the Southwest border. This could include cases also coded as
gang-related or as another type of case. Our discussion of Project
Gunrunner cases in this report is based on ATF data that meets this
definition.

Laws Governing Firearms Trafficking and Private Sales of Guns

       There is no specific federal statute specifically prohibiting firearms
trafficking. Consequently, when ATF agents identify trafficking operations
and develop cases to refer to prosecutors, they use various federal and state
charges. In addition, some existing federal regulations and statutes, such
as those that require transaction records or background checks, do not
apply to sales of guns between private individuals.20

Project Gunrunner Federal Statutes Used by ATF

      ATF agents work with federal prosecutors to charge Project
Gunrunner defendants under a wide range of federal statutes, not all of
which directly cite firearms offenses, such as conspiracy charges and drug
offenses. Between FY 2004 and FY 2009, ATF used 75 different statutes to
seek federal prosecutions of Project Gunrunner defendants. These statutes
prohibit activities associated with firearms trafficking – such as falsifying
information when purchasing a gun and dealing guns without a license.
Table 1 provides a list, in ascending order of statute number, of the 10
statutes most frequently used in ATF’s Project Gunrunner referrals for
prosecution during that period. We discuss ATF’s referrals and USAOs’
prosecutions of Project Gunrunner cases in Part III of this report.




       20 Some federal regulations and statutes do apply to the private sale of guns, such

as the prohibition of transfers to known convicted felons. Additionally, some states have
enacted laws regulating transfers of firearms between private individuals.


U.S. Department of Justice                                                            8
Office of the Inspector General
Evaluation and Inspections Division
    Table 1: Top 10 Statutes Used in Cases Referred for Prosecution
      of Project Gunrunner Defendants (FY 2004 through FY 2009)

Statute                    Statute Definition

18 U.S.C. § (2)            Aiding and abetting

18 U.S.C. § 371            Conspiracy to commit offense against the United States*

18 U.S.C. § 922(a)(1)(A)   Willfully engage in firearms business without a license
                           Knowingly making a false statement in connection with a
18 U.S.C. § 922(a)(6)
                           firearm purchase
18 U.S.C. § 922(g)(1)      Knowing possession of a firearm by a convicted felon

18 U.S.C. § 922(g)(5)      Knowing possession of a firearm by an illegal alien

18 U.S.C. § 924(a)(1)(A)   Knowingly making a false statement

18 U.S.C. § 924(c)         Use of a firearm in a federal drug or violent crime
                           Manufacturer, distribution, or possession of a controlled
21 U.S.C. § 841(a)(1)
                           substance
21 U.S.C. § 846            Drug conspiracy

* 18 U.S.C. § 371 does not relate specifically to crimes involving firearms. Rather,
according to Executive Office for United States Attorneys, prosecutors use the charge when
there are no other conspiracy charges applicable to a case, often as part of the plea
bargaining process.
Source: ATF data on federal statutes referred to USAOs for prosecution.

Private Sales of Guns

      When an individual buys a gun from a licensed gun dealer, the
purchaser must show proper identification to the gun dealer, fill out a
federal Firearms Transaction Record (Form 4473), including personal
information (such as name and address) and a short questionnaire to
determine eligibility to purchase a gun, and submit to a National Instant
Criminal Background Check System check.21 The gun dealer retains a copy

       21 Mandated by the Brady Handgun Violence Prevention Act of 1993 and launched

by the FBI on November 30, 1998, the National Instant Criminal Background Check
System is used by gun dealers to instantly determine whether a prospective buyer is eligible
to possess guns or explosives. Before completing the sale, a gun dealer employee calls the
FBI or another designated agency to ensure that the customer does not have a criminal
record or is not otherwise ineligible to possess a gun because, for example, the buyer has
been adjudicated as mentally defective. More than 100 million such checks have been
made in the last decade, leading to more than 700,000 denials, according to the FBI
(www.fbi.gov/hq/cjisd/nics.htm).


U.S. Department of Justice                                                             9
Office of the Inspector General
Evaluation and Inspections Division
of the Form 4473 as a permanent record of the transfer of the weapon. This
enables ATF to determine who originally purchased a gun if it is
subsequently seized by law enforcement investigating a crime involving the
gun.

       Individuals who buy guns from an unlicensed private seller in a
“secondary market venue” (such as gun shows, flea markets, and Internet
sites) are exempt from the requirements of federal law to show identification,
complete the Form 4473, and undergo a National Instant Criminal
Background Check System check. Therefore, according to ATF and other
Department officials we interviewed, individuals prohibited by law from
possessing guns can easily obtain them from private sellers and do so
without any federal records of the transactions. According to these officials,
gun shows are a primary source of weapons for Mexican drug cartels.
Generally, ATF can most readily trace a gun to the individual who first
purchased it from a gun dealer. ATF has limited ability to trace used
firearms sold by gun dealers and generally cannot trace privately sold guns
to the private purchaser.

Regulatory Function

       ATF regulates the firearms industry through licensing and inspections
of gun dealers. The objective of ATF’s application inspections is to ensure
that only qualified individuals receive a license to sell guns. Also, ATF
Industry Operations Investigators conduct periodic regulatory inspections of
gun dealers by reviewing records, inventory, and the dealers’ conduct of
business. During these inspections, ATF educates gun dealers about
trafficking indicators and how to report suspicious behaviors to ATF.
Through these activities, ATF seeks to deter the diversion of guns from
lawful commerce into the illegal market, where, among other uses, they may
be trafficked to Mexico.

      ATF tracks the status and results of its gun dealer inspections using its
automated N-Spect system. ATF considers any inspection conducted in the
Southwest border states – California, Arizona, New Mexico, and Texas – as
Project Gunrunner-related. In Part I of this report, we describe the number of
inspections conducted by ATF before and during Project Gunrunner.

Intelligence Function

       ATF collects, analyzes, and disseminates firearms trafficking-related
intelligence and has developed specialized information and intelligence
resources to provide direction and focus to its enforcement and regulatory
functions. Under Project Gunrunner, ATF seeks to provide agents with
comprehensive information to detect, investigate, apprehend, and refer for

U.S. Department of Justice                                              10
Office of the Inspector General
Evaluation and Inspections Division
prosecution individuals who illegally traffic guns. For example, ATF agents
and intelligence personnel collect intelligence from gun dealers’ reports on
the sales of multiple handguns. Similarly, Industry Operations
Investigators use intelligence-based risk factors as a part of their process for
determining which gun dealers to inspect.

       ATF’s intelligence structure consists of both headquarters-level and
field entities, as described below:

       ATF Headquarters. ATF’s Office of Strategic Intelligence and
Information provides field personnel with intelligence to identify patterns and
trends in firearms trafficking and related crime. In September 2008, this
Office established a Field Intelligence Support Team dedicated to the
Southwest border. Although ATF is not a recognized member of the national
intelligence community, the Office of Strategic Intelligence and Information
interacts with national and international intelligence agencies. Included in
the Office’s structure is ATF’s Gun Desk at EPIC, which is a central repository
for weapons-related intelligence. The Violent Crime Analysis Branch, co­
located with ATF’s National Tracing Center in Martinsburg, West Virginia,
also falls under the Office of Strategic Intelligence and Information.
Intelligence analysts at the Violent Crime Analysis Branch analyze and
disseminate gun trace data and other intelligence to field personnel.

       ATF Field Divisions. Each of ATF’s 25 field divisions typically has a
Field Intelligence Group, whose mission is to collect, evaluate, and
disseminate tactical and strategic intelligence to the division’s field offices.22
Although the Office of Strategic Intelligence and Information provides
strategic intelligence to all of ATF, each field division’s Field Intelligence
Group is considered the main intelligence asset for that division. Field
Intelligence Groups receive information from a variety of ATF and external
sources (Figure 3). Staffing varies, but Field Intelligence Groups generally
include a supervisor (an agent), one to two Intelligence Officers (also agents),
one to two Industry Operations Intelligence Specialists, two to four
Intelligence Research Specialists, one to two Investigative Analysts, and one
secretary.23



         22 ATF defines tactical intelligence as information produced to support operations

or that relates to the specific time, date, nature, and other details of events. Strategic
intelligence is defined as information required for the formulation of policy and plans at the
regional, national, and international levels. Strategic intelligence differs primarily from
tactical intelligence in level of use but may also vary in scope and detail.

       23 The ATF Field Intelligence Group Supervisor’s Guide Book (September 2009)
discusses the Field Intelligence Group composition and member responsibilities.


U.S. Department of Justice                                                             11
Office of the Inspector General
Evaluation and Inspections Division
                 Figure 3: ATF Intelligence Sharing Process




  Note: The figure depicts a simplified version of ATF’s general process.
  Source: OIG.




U.S. Department of Justice                                                  12
Office of the Inspector General
Evaluation and Inspections Division
       Intelligence Collection Plan and ATF Intelligence Sharing Process. In
2009, the Office of Strategic Intelligence and Information distributed to all
field divisions ATF’s first Intelligence Collection Plan for Project Gunrunner.
ATF published the plan intending that each field division would tailor it to
its own operational needs. The plan stated that “ATF must develop a
‘bee-hive mentality’ whereby everyone works toward a common goal,”
identifying intelligence gaps and collecting information that ultimately
results in intelligence products to be acted upon.24 According to the plan,
the Office of Strategic Intelligence and Information is to share with Mexican
law enforcement “real-time, actionable intelligence relating to firearms
trafficking networks” operating in the United States and Mexico. To
accomplish this goal, ATF Field Intelligence Group supervisors, Resident
Agents in Charge, and other field supervisors are to determine and prioritize
intelligence requirements. The plan also focuses on the continuous
collection and reporting of information to EPIC, which the plan states is
responsible for directing the intelligence collection effort.

       Additionally, the ATF Violent Crime Analysis Branch and the National
Tracing Center disseminate gun trace data, information from reports on
multiple sales of handguns, and other information to Field Intelligence
Groups and field agents, who review the information to detect firearms
trafficking patterns and to further their investigations. Industry Operations
Investigators also make referrals to agents, through the Field Intelligence
Group when they find potential evidence of firearms trafficking during gun
dealer inspections. Local gun dealers and other law enforcement agencies
provide intelligence directly to ATF agents, investigators, and the Field
Intelligence Group.

Gun Tracing and eTrace

      Gun tracing enables ATF to track a gun from its manufacturer or
importer to a wholesaler and retail dealer, and then identify the gun’s
original retail purchaser. U.S. law does not require the tracking of private
sales of guns, except for weapons subject to the National Firearms Act.25


       24ATF, Project Gunrunner Southwest Border Initiative Intelligence Collection Plan,
Update FY 2010 (November 2009), 4.

        25 The National Firearms Act, enacted in 1934, limits the availability of machine

guns, short-barreled shotguns, short-barreled rifles, sound suppressors (silencers), and
other similar weapons that were often used by criminals during the Prohibition Era. The
Gun Control Act of 1968 expanded the scope of the National Firearms Act to include
destructive devices (for example, explosive and incendiary bombs, flash bang grenades, and
weapons with a bore of greater than one-half inch in diameter), machine gun frames or
receivers, and conversion kits for machine guns.


U.S. Department of Justice                                                         13
Office of the Inspector General
Evaluation and Inspections Division
Tracing can help ATF identify trafficking corridors, patterns, schemes,
traffickers, accomplices, and straw purchasers.26

      To initiate a gun trace, the law enforcement agency that recovers a
crime gun provides ATF’s National Tracing Center with the gun’s serial
number and other information required to identify it to the exclusion of all
other firearms. The National Tracing Center responds with the gun’s
purchase history and other information. Law enforcement agencies may
submit a trace by facsimile, telephone, or through ATF’s Internet-based
eTrace system.

       The eTrace system can be accessed directly by ATF personnel and
other law enforcement agencies worldwide. It allows law enforcement
agencies to submit gun trace requests electronically, to monitor the progress
of the traces electronically, and to retrieve completed results of their own
agency’s trace requests. Using eTrace, authorized law enforcement
representatives can also access a historical database of their agency’s own
trace-related data and generate analytical reports and investigative lead
information. The representatives of one agency cannot access the results of
other agencies’ trace requests at this time. However, according to ATF,
system modifications are in development to allow agencies to share trace
data with each other in accordance with, and subject to, new appropriations
laws.

       To provide Mexican law enforcement authorities with direct access to
gun tracing, ATF developed eTrace 4.0, also known as Spanish eTrace,
which receives and provides trace results in Spanish. In December 2009,
ATF piloted a program to deploy Spanish eTrace to, and to train Mexican
officials in, the system’s use. Initially, ATF planned to provide Spanish
eTrace to all federal and state police laboratories in Mexico. However, as of
June 2010, ATF staff told us that Mexican state laboratories were not able
to use Spanish eTrace because of objections from the Mexican federal
government (discussed further in this report).27 The eTrace system is the
primary source of investigative leads pertaining to guns trafficked to Mexico.


       26  According to ATF, a “straw purchase” occurs when the actual buyer of a firearm
uses another person, “the straw purchaser,” to execute the paperwork necessary to
purchase a firearm from a gun dealer. The actual buyer is often prohibited from
purchasing the gun. The straw purchaser violates federal law by making a false statement
with respect to the information required to be kept in the gun dealer’s records. According
to ATF, straw purchasing is one of the most frequent methods used to illegally acquire
guns.

       27 In September 2010, ATF told us that it had deployed Spanish eTrace to all
Spanish-language eTrace users in March 2010, including to Mexican federal law
                                                                                       Cont.
U.S. Department of Justice                                                            14
Office of the Inspector General
Evaluation and Inspections Division
Organized Crime Drug Enforcement Task Force (OCDETF)

       OCDETF is a Department of Justice program that seeks to combine
resources and expertise of federal, state, and local law enforcement agencies
to identify, disrupt, and dismantle organizations responsible for drug
trafficking.28 According to the OCDETF website, OCDETF targets not only
the drug operations, but also the “tools of the trade” for these organizations,
including money laundering and firearms trafficking.

      When a case has been designated as an OCDETF case, the costs of
the investigation – including travel, wiretaps, confidential informant
subsistence, and other evidence-gathering expenses – may be reimbursed by
the OCDETF Program, depending on funding availability. To have a case
approved as an OCDETF case, an agency presents it to other agencies
involved in the program, including the USAO with jurisdiction in the area.
Once the case is vetted by a federal prosecutor designated to support the
OCDETF Program, it is presented to one of nine regional OCDETF
committees, which must give final approval before the program’s resources
are dedicated to the case.

       The OCDETF Program also establishes task forces (which it refers to
as strike forces) to permanently co-locate representatives from federal law
enforcement agencies, along with representatives of state and local law
enforcement, in a city. The participating agencies, including ATF when it
chooses to do so, work together to investigate trafficking organizations.
OCDETF task forces are currently located in San Diego, Phoenix, El Paso,
Houston (including satellite offices in Laredo and McAllen), Tampa,
San Juan, Atlanta, New York, and Boston. ATF’s use of the OCDETF
Program is discussed in Part III of this report.

ATF’s Coordination with Other Federal Law Enforcement Agencies

      To effectively implement Project Gunrunner, ATF must coordinate
with other federal agencies within and outside of the Department of Justice

enforcement. Yet, as noted above, in June 2010, we were informed that Mexican
laboratories were not using Spanish e-trace. As a result of a September 2010 eTrace
memorandum of understanding between ATF and the government of Mexico, ATF plans to
begin redeployment of Spanish eTrace in Mexico in November 2010 and to offer training to
Mexican personnel in all 31 states.

       28 Agencies represented in the OCDETF Program include ATF, the DEA, the FBI,

Immigration and Customs Enforcement, the U.S. Marshals Service, the Internal Revenue
Service, and the U.S. Coast Guard – in cooperation with the Department of Justice
Criminal Division, the Tax Division, and the 94 USAOs, as well as with state and local law
enforcement.


U.S. Department of Justice                                                           15
Office of the Inspector General
Evaluation and Inspections Division
that are involved in monitoring and protecting the U.S. border with Mexico.
As discussed below, some of those agencies have their own programs that
target firearms trafficking, either directly or indirectly.

Drug Enforcement Administration (DEA)

       The DEA enforces controlled substance laws and regulations, and
investigates organizations and individuals involved in the growing,
manufacture, or distribution of controlled substances intended to be
trafficked into the United States. Although DEA is primarily focused on
drug trafficking enterprises, there is often a nexus between Mexican drug
and firearms trafficking organizations. As a result, ATF and the DEA work
together on various task forces in Southwest border locations and in
Mexico.

United States Attorneys’ Offices (USAO)

       The USAOs determine which federal cases to prosecute within their
jurisdictions. Each USAO is led by a presidentially appointed United States
Attorney, who serves as the chief federal law enforcement officer for the
judicial district. Under Project Gunrunner, ATF agents work directly with
Assistant U.S. Attorneys (AUSA) to develop firearms trafficking-related cases
for prosecution.

Department of State

        The Department of State, through its Bureau for International
Narcotics and Law Enforcement Affairs, provides training, operations,
intelligence, and logistical support for foreign counternarcotics programs
established by the U.S. Foreign Assistance Act.29 In the U.S. Embassy in
Mexico City, a Department of State Narcotics Affairs Section provides
counternarcotics policy and strategy guidance to Ambassadors and
facilitates funding and other support for the government of Mexico. Under
Project Gunrunner, ATF works with staff from the Narcotic Affairs Section to
provide Mexican officials with equipment and training on gun tracing and
identification, and investigations.

Department of Homeland Security (DHS)

      Immigration and Customs Enforcement (ICE). ICE, the largest
investigative arm within DHS, investigates a wide range of domestic and
international activities related to the illegal movement of people and goods

       29   22 U.S.C. § 2151 et seq.


U.S. Department of Justice                                              16
Office of the Inspector General
Evaluation and Inspections Division
into, within, and out of the United States. ICE’s investigative
responsibilities include narcotics, weapons, and human smuggling, and
export enforcement issues.

      ATF’s Project Gunrunner and ICE’s Operation Armas Cruzadas both
target firearms trafficking to Mexico, but the two initiatives target different
points in the gun smuggling process. Launched in 2008 by ICE, Operation
Armas Cruzadas is focused on trans-border weapons smuggling networks
along the Southwest border. Project Gunrunner targets the trafficking of
guns from the United States to Mexico through investigations of firearms
found to have been trafficked into Mexico and related violent crime.

      In addition, ATF and ICE have worked together on investigations
involving firearms trafficking to Mexico through ATF’s participation in
several ICE-led, multi-agency Border Enforcement Security Task Forces.

       Customs and Border Protection (CBP). The CBP inspects traffic
entering the United States and, to a much lesser extent, traffic leaving the
United States. The CBP seizes drugs, cash, guns, and other contraband as
it is smuggled across the U.S. border. In Southwest border locations, ATF
coordinates with the CBP regarding inspections of suspected firearms
traffickers crossing the border.

ATF’s Coordination with Mexican Agencies

Attorney General of the Republic – Procuraduría General de la República
(PGR)

       In Mexico, the Attorney General’s office investigates and prosecutes
Mexican federal crimes, including all gun-related offenses. Its staff includes
investigators and intelligence analysts. ATF works with the Mexico Attorney
General’s office to obtain information used in gun tracing and for firearms
trafficking investigations.

National Center for Information, Analysis, and Planning in Order to Fight
Crime – El Centro Nacional de Planeación, Análisis, e Información para el
Combate a la Delincuencia (CENAPI)

      CENAPI, a unit of the Attorney General’s office, contains analysts who
conduct information gathering, intelligence analysis, and data
dissemination. CENAPI researches areas of organized crime, including the
largest organized crime threat in Mexico, drug cartels, and builds databases
containing this intelligence. ATF works with CENAPI because it is the
primary Mexican agency responsible for deploying Spanish eTrace


U.S. Department of Justice                                                17
Office of the Inspector General
Evaluation and Inspections Division
(discussed later in this report) and for entering Mexican crime gun data into
that system.

Secretariat of Public Security – Secretaría de Seguridad Pública

      The Secretariat of Public Security is the Mexican law enforcement
agency that has the authority to police and conduct investigations at a
national level. According to U.S. law enforcement officials, the Secretariat of
Public Security is being restructured and trained to better combat Mexican
drug cartels and to form a force of “street cops” similar to its federal
counterparts in the United States. ATF and other U.S. law enforcement
agencies assist in the training of new officers and work with them on
investigations.

Secretary of National Defense/Mexican Military – La Secretaría de la
Defensa Nacional

       The military in Mexico often supplements the efforts of law
enforcement entities, giving it an important role in the conflict with the drug
cartels and associated firearms trafficking activity. In areas of Mexico with
particularly high levels of violent crime, the military has been assigned a
public safety and policing role. The Mexican military is responsible for
taking possession of and safeguarding guns and explosives seized in Mexico
within a few days of being seized.




U.S. Department of Justice                                               18
Office of the Inspector General
Evaluation and Inspections Division
      PURPOSE, SCOPE, AND METHODOLOGY OF THE OIG REVIEW 



Purpose

      This review examined ATF’s implementation of Project Gunrunner’s
mission to reduce firearms trafficking to Mexico and related violent crime.30
We examined ATF’s execution of its enforcement and regulatory programs
related to the Southwest border and Mexico, its effectiveness in developing
and sharing intelligence, its traces of Mexican crime guns, its coordination
with U.S. and Mexican law enforcement, and how ATF worked with USAOs
to prosecute firearms traffickers.

Scope

       We conducted our fieldwork from November 2009 through June 2010.
We also gathered updated information from ATF through September 2010.
In evaluating the impact of Project Gunrunner, we generally examined ATF
activities from FY 2006, when the project became a national program,
through FY 2009. When it was available, we also examined data from
FY 2004 through FY 2009 to compare ATF’s operations for 3 years before
and after its implementation of Project Gunrunner.

       This review is the second conducted by the Office of the Inspector
General (OIG) on Project Gunrunner since 2009. The first review examined
ATF’s planning, hiring, staffing, and allocation of resources for Project
Gunrunner, including its expenditure of $10 million in Recovery Act
funds.31 This second Project Gunrunner review continued the examination
of ATF’s procedures for coordinating among its Southwest border field
divisions.

Methodology

       In this review we conducted interviews; performance, trace,
prosecutorial, and investigative data analyses; and document reviews. We
also visited ATF’s National Tracing Center and Violent Crime Analysis


        30 Although our review included ATF’s efforts to reduce violent crime associated

with firearms trafficking to Mexico, the causes of changes in the levels of violence along the
border are numerous and are not attributable only to ATF’s implementation of Project
Gunrunner.

       31 U.S. Department of Justice Office of the Inspector General, Interim Review of
ATF’s Project Gunrunner, Evaluation and Inspections Report I-2009-006 (September 2009).


U.S. Department of Justice                                                              19
Office of the Inspector General
Evaluation and Inspections Division
Branch in Martinsburg, West Virginia; ATF’s Dallas, Phoenix, and
Los Angeles Field Divisions; and its Mexico Country Office in Mexico City.32

Interviews

       We conducted 99 in-person and telephone interviews with personnel
from ATF headquarters, ATF’s Dallas, Phoenix, and Los Angeles Field
Divisions and selected offices, and the Mexico Country Office; the Executive
Office for United States Attorneys (EOUSA) and USAOs in several Southwest
border districts; the Department’s Criminal Division; the DEA; the
U.S. Department of State; DHS, including its ICE and CBP components; and 

military and law enforcement officials of the Mexican government. 

Appendix III provides a list of all interviewees. 


Data Analysis

       We analyzed several types of ATF and USAO data that generally
covered FY 2004 through FY 2009. The ATF data included gun trace results
from the Southwest border and Mexico, Project Gunrunner cases initiated
and referred to USAOs for federal prosecution, inspections of gun dealers in
the Southwest border states, and statistics on active gun dealers and
multiple sales of handguns. We also reviewed data from ATF’s case
management system on Industry Operations Investigators’ generation and
referral of investigative leads to ATF agents. Finally, we analyzed USAO
data from its Legal Information Office Network System (LIONS), on
declinations of ATF’s Project Gunrunner cases and of ATF-led joint cases
that were referred to USAOs for prosecution. LIONS collects case
information for federal criminal offenses, but does not track its cases as
being Project Gunrunner cases.

Document Review

       We reviewed ATF policies, guidelines, and plans relating to Project
Gunrunner and firearms trafficking. These included operating plans,
intelligence products, performance measures, directives and guidance to
field personnel, and field office documents. We also reviewed ATF and
EOUSA budget requests and resource justifications related to firearms
trafficking and Southwest border operations. In addition, we reviewed
EOUSA policies and guidelines related to the prosecution of ATF’s firearms
trafficking-related Project Gunrunner cases. We reviewed ATF managers’

        32 During the fieldwork for our previous report on Project Gunrunner, we also

visited ATF’s Houston Field Division and its McAllen Field Office, as well as the Las Cruces
Field Office of the Phoenix Field Division. Some of the information we obtained from those
interviews contributed to our findings in this report.


U.S. Department of Justice                                                            20
Office of the Inspector General
Evaluation and Inspections Division
testimony and statements to Congress, as well as congressional testimony
by EOUSA, DHS, and Office of the Attorney General officials on firearms
trafficking and Southwest border violence.

      Consistent with our standard practice, on September 3, 2010, we
provided a working draft of this report to ATF and other components and
agencies for their review and comment. In response to their comments, as
well as a result of updated data and information provided by ATF, we made
some changes to the working draft where appropriate.




U.S. Department of Justice                                          21
Office of the Inspector General
Evaluation and Inspections Division
                     PART I: ATF’S EXPANDED EFFORTS 

                    IN SUPPORT OF PROJECT GUNRUNNER 



       Through Project Gunrunner, ATF has increased several of
       its program activities related to firearms trafficking,
       including the number of gun trace submissions, the number
       of investigations it initiated, the number of these
       investigations it subsequently referred for prosecution, and
       the number of defendants it referred for prosecution. ATF
       also increased the number of compliance inspections it
       conducted, the hours spent by its Southwest border field
       divisions on inspections, and the number of referrals
       Industry Operations made to Criminal Enforcement for
       investigation.


       ATF’s approach to combating firearms trafficking and related violence
along the Southwest border, as articulated in its June 2007 Gunrunner
strategy, has been to focus on key activities, including tracing guns to
identify traffickers and patterns, conducting criminal investigations of
traffickers, conducting compliance inspections of gun dealers in the region,
and referring leads from Industry Operations to Criminal Enforcement.
Relevant activities are tracked in ATF’s case management (N-Force) and
inspections (N-Spect) databases, and its tracing system (eTrace).

      In the section below, we describe our analysis of seven categories of
data from these databases to measure Project Gunrunner’s performance:

      gun trace requests received from U.S. and Mexican locations, 

      Project Gunrunner cases initiated, 

      cases referred for prosecution, 

      defendants referred for prosecution, 

      completed gun dealer compliance inspections, 

      hours spent on gun dealer compliance inspections, and 

      referrals from Industry Operations to Criminal Enforcement.33


      As stated in the Background section of this report, ATF considers any
investigation conducted nationwide to be a Project Gunrunner case if it
involves firearms trafficking or violent crime with a nexus to the Southwest

        33 ATF’s strategic plan for FY 2010 to FY 2016 included broad performance

measures of firearms trafficking. Three of the performance measures were similar to those
we analyzed: number of defendants referred for prosecution for violation of firearms
trafficking laws, number of firearms trafficking investigations initiated, and number of
traces submitted.


U.S. Department of Justice                                                         22
Office of the Inspector General
Evaluation and Inspections Division
border. Throughout this report, any reference made to a Project Gunrunner
case, to referrals of cases, or to referrals of defendants for prosecution uses
ATF’s definition.

       For measures relating to trace submissions and Industry Operations
inspections, we compared the 3-year period before ATF’s implementation of
Project Gunrunner (FY 2004 through FY 2006) with the 3-year period after
ATF’s initiation of Project Gunrunner (FY 2007 through FY 2009). For
measures relating to Project Gunrunner cases, we examined only the period
after the initiative began (FY 2007 through FY 2009).34

      We found that since implementing Project Gunrunner, ATF has
increased its gun trace submissions from U.S. Southwest border locations
and from Mexico, the number of investigations ATF initiated, the number of
cases ATF subsequently referred for prosecution, and the number of
defendants ATF referred for prosecution. ATF also increased the number of
compliance inspections conducted in its Southwest border field divisions
and the number of referrals Industry Operations made to Criminal
Enforcement for investigation. These trends are depicted in Figure 4 (below)
and discussed further below. We also found that ATF increased its efforts
under Project Gunrunner through its Gun Runner Impact Team initiative, a
targeted 120-day effort implemented in the Houston Field Division during
summer 2009.

The number of traces of U.S. and Mexican crime guns has increased
since Project Gunrunner began.

        ATF’s June 2007 Gunrunner strategy describes tracing as an
essential tool for identifying potential traffickers and the “cornerstone” of
Project Gunrunner. We found that ATF has increased tracing along the
Southwest border and in Mexico. From FY 2004 through FY 2006, the four
Southwest border field divisions and Mexico traced, on average, 20 percent
of all traces requested from the United States and Mexico (143,024 of
714,472 traces).35 The number of such traces increased to 26 percent
(207,609 of 804,136 traces) in FY 2007 through FY 2009.

       34  Although ATF initiated cases involving firearms trafficking and related violent
crime prior to FY 2007, our attempt to analyze the 3-year period prior to ATF’s initiation of
Project Gunrunner did not generate reliable results. ATF had not developed a program
code to track these cases until after the initiative began in 2006, and ATF was unable to
fully identify firearms trafficking and other cases from FY 2004 through FY 2006 that
would be comparable to Project Gunrunner cases. Therefore, a comparison of firearms
trafficking cases prior to FY 2007 would result in an overstatement of the increase in
firearms trafficking cases that resulted from Project Gunrunner.

       35 Different ATF offices analyze trace data in different ways. The National Tracing

Center typically reports annual trace numbers according to the date the trace was
submitted. In comparison, the Violent Crime Analysis Branch bases its analyses on the
                                                                                        Cont.
U.S. Department of Justice                                                             23
Office of the Inspector General
Evaluation and Inspections Division
      The largest percentage increase in traces during Project Gunrunner
occurred in traces from Mexico. From FY 2004 through FY 2006, traces of
Mexican crime guns accounted for only 1 percent of all traces (9,256 traces).
Since the start of Project Gunrunner, in FY 2007 through FY 2009, Mexican
traces increased to 8 percent of all traces (62,606 traces). The increase in
traces of Mexican crime guns from FY 2004 through 2006 to FY 2007
through 2009 was 576 percent.




date a gun was recovered, but if no recovery date exists, it will use the trace date. This
results in differences between the annual trace number reported by the National Tracing
Center and the Violent Crime Analysis Branch because there are typically delays between
when Mexican crime guns are recovered and when they are submitted for tracing. In this
report, we base our analysis on data provided by the Violent Crime Analysis Branch.


U.S. Department of Justice                                                           24
Office of the Inspector General
Evaluation and Inspections Division
              Figure 4: ATF Project Gunrunner Performance Measures

         Mexican Traces of Recovered Crime Guns                                 Project Gunrunner Cases Initiated
     30,000                                                              1000

                                                      25,901                                                           886
     25,000
                                                              800

                                                               21,726
     20,000
                                                              600
                            538
                                             14,979                                      424
     15,000

                                                                          400

     10,000

                   5,834                                                  200

         5,000

                           1,518 1,904                                      0

             0

                                                                                         07               08              09
                    04         05     06         07    08       09




         Project Gunrunner Cases and Defendants                             Completed Compliance Inspections,
            Referred to USAOs for Prosecution                                       Southwest Border
                                                                        3,500
                                                                                                                               2,938
  600                                                                   3,000
                                           510                          2,500
  500                      420                         Cases
              373                                                       2,000                               1,764 1,980
  400                                                  Referred                                     1,488
                                     272                                1,500
  300                                                                              723        662
           177           220                                            1,000
  200                                                  Defendants         500
  100                                                  Referred             0

    0

                                                                                    04         05    06         07   08         09
              07           08          09


                  Compliance Inspection Hours,                                Industry Operations Referrals to
                      Southwest Border                                  ATF Criminal Enforcement, Southwest Border
     140,000                                                            1000

                                            116,439                                                 826        814   851       854
     120,000

                                87,613 95,037                            800

     100,000
                                                                              582
      80,000
             74,480                                         600

      60,000
                                                                     307
                                                                         400
              33,317 40,229
      40,000

                                                                         200

      20,000

           0
                                                              0
                     04         05     06        07     08      09                 04         05     06         07   08         09




 Note: Yellow indicates results before Project Gunrunner’s inception (FY 2004 through
 FY 2006), and blue indicates results since the project was implemented (FY 2007 through
 FY 2009).

 Sources: OIG analysis of ATF Violent Crime Analysis Branch and Office of Strategic
 Management data.




U.S. Department of Justice                                                                                                      25
Office of the Inspector General
Evaluation and Inspections Division
Cases initiated, referred for prosecution, and defendants referred for
prosecution for firearms trafficking to Mexico or related violent crime
also increased during Project Gunrunner.

      We also determined that ATF significantly increased the number of
cases involving firearms trafficking or violent crime with a nexus to the
Southwest border that it initiated after the implementation of Project
Gunrunner in 2006. ATF initiated 424 such cases in FY 2007, 538 in
FY 2008, and 886 in FY 2009, an increase of 109 percent in that period.36

      The number of cases involving firearms trafficking or violent crime
with a nexus to the Southwest border that ATF referred to USAOs for
prosecution also increased after Project Gunrunner began. ATF referred
177 such cases for prosecution in FY 2007, 220 in FY 2008, and 272 in
FY 2009, an increase of 54 percent.

       The number of defendants referred to USAOs for prosecution for
firearms trafficking or violent crime with a nexus to the Southwest border
also increased since the start of Project Gunrunner. ATF referred 373
defendants for prosecution in FY 2007, 420 in FY 2008, and 510 in
FY 2009, an increase of 37 percent.

The numbers of gun dealer compliance inspections conducted,
inspection hours, and inspection referrals to Criminal Enforcement
increased during Project Gunrunner.

       Since Project Gunrunner began, ATF has increased the number of
both gun dealer compliance inspections and the compliance inspection
hours worked by the Southwest border field divisions. From FY 2004
through FY 2006, ATF completed 2,873 compliance inspections in the
region. During that period, ATF personnel worked a total of 148,026 hours
on compliance inspections there. The number of compliance inspections
increased 133 percent after Project Gunrunner began to 6,682 between
FY 2007 and FY 2009. The number of compliance inspection hours worked
also increased to 299,089 between FY 2007 and FY 2009, an increase of
102 percent.

      Since FY 2004, the four ATF Southwest border field divisions have
increased the number of Industry Operations referrals to law enforcement,
which includes referrals handled within ATF and those sent to other federal,

        36 Although the data that ATF provided to the OIG showed that the number of

Project Gunrunner cases initiated by ATF increased from FY 2007 through FY 2009, the
total number of cases specifically related to firearms initiated by ATF nationwide decreased
by 909 cases (5 percent) in the same time period, from 17,548 in FY 2007 to 16,639 in
FY 2009.


U.S. Department of Justice                                                            26
Office of the Inspector General
Evaluation and Inspections Division
state, and local law enforcement agencies. Industry Operations referrals are
typically created during or after a gun dealer inspection. There are no
minimum guidelines as to what triggers a referral, but Industry Operations
Investigators are trained to identify potential illegal activity.

       To determine the number of referrals ATF made and their outcomes
we analyzed all the inspection referrals to ATF Criminal Enforcement
personnel contained in the data provided by ATF. Industry Operations staff
made 1,715 referrals to ATF Criminal Enforcement from FY 2004 through
FY 2006 in the four Southwest border field divisions. The number of such
referrals increased 47 percent after Project Gunrunner began, to 2,519 from
FY 2007 through FY 2009.37

ATF used its temporary Gun Runner Impact Team initiative to increase
inspections and case initiations in the Houston Field Division.

      ATF also increased its efforts under Project Gunrunner through its
Gun Runner Impact Team initiative, a temporary deployment of 100 agents,
Industry Operations Investigators, and support staff to the Houston Field
Division during summer 2009. ATF deployed the personnel for 120 days to
address a backlog in investigative leads and gun dealer inspections in the
Houston Field Division and “aggressively target and disrupt groups and
organizations responsible for trafficking firearms to Mexico.”38

       According to an October 2009 Department press release, the initiative
involved investigating over 1,100 investigative leads, which resulted in
opening 276 firearms trafficking cases involving the seizure of over 440
illegal firearms and other contraband. In an internal assessment of the
initiative’s outcome, ATF stated that several of these cases related directly to
Mexican drug cartels and involved one or more individuals who had
recruited several straw purchasers who purchased firearms that were then
trafficked to Mexico. On the regulatory side, ATF reported that Industry
Operations conducted over 1,000 gun dealer inspections, which led to 440
violations. In September 2010, ATF announced the conclusion of another
Gun Runner Impact Team initiative in the Phoenix Field Division, reporting
that the Phoenix team had initiated 174 firearms trafficking cases, seized
1,300 illegally trafficked firearms, and conducted over 800 gun dealer
inspections.


       37 ATF Industry Operations staff also made 791 referrals to state and local law

enforcement agencies and to other federal agencies such as ICE, the FBI, and the Internal
Revenue Service.

        38 Department of Justice press release, Justice Department Announces Success in

Battle Against Firearms Trafficking and Recovery Act Funds to Build on Project Gunrunner
(October 1, 2009).


U.S. Department of Justice                                                          27
Office of the Inspector General
Evaluation and Inspections Division
                     PART II: ATF FIREARMS TRAFFICKING 

                       INTELLIGENCE AND INFORMATION 



       Under Project Gunrunner, ATF does not systematically
       share strategic intelligence with its Mexican and
       U.S. partner agencies, and ATF Southwest border Field
       Intelligence Groups are not consistently providing
       actionable investigative leads to field agents. ATF also
       needs to better implement its Border Liaison Program to
       improve information sharing and coordination between
       ATF’s U.S. and Mexico elements.


ATF and its Mexican and U.S. partner agencies are not systematically
and consistently sharing strategic intelligence needed to combat
firearms trafficking to Mexico.

       ATF’s partnerships with other U.S. agencies and the Mexican
government are a critical component of Project Gunrunner. ATF’s Project
Gunrunner strategy states that each ATF intelligence entity “must be
diligent in its exercise of information flow to and from . . . other domestic
and Mexican counterparts.”39

       However, we found that strategic intelligence on drug cartel firearms
trafficking activity – including trends and patterns in their operations, the
locations where they are operating, and the composition of their
membership and associates – is not consistently shared between ATF and
Mexican law enforcement, and between ATF, the CBP, DEA, and ICE.
Although ATF has shared some strategic intelligence products with these
agencies, it is not doing so systematically and regularly.40

Mexican law enforcement reports that ATF’s exchange of strategic
intelligence is incomplete.

      Although the government of Mexico has intensified its national efforts
to counter the drug cartels, Mexican officials told us they have sought but
not received strategic intelligence from ATF on patterns and trends of

       39   ATF, Southwest Border Initiative: Project Gunrunner (June 2007), 16.

       40 ATF has identified the need to improve intelligence sharing with Mexican and

U.S. law enforcement partners and improve its understanding of intelligence gaps in a
recent strategy document entitled “Project Gunrunner – A Cartel Focused Strategy”
(September 2010, cartel strategy). In that document, ATF stated that its efforts to combat
firearms trafficking “will require greater collaboration between ATF field divisions and other
law enforcement and intelligence agencies.”


U.S. Department of Justice                                                             28
Office of the Inspector General
Evaluation and Inspections Division
firearms trafficking from the United States to Mexico. For example, in a
November 2009 monthly U.S.-Mexico GC Armas meeting on firearms
trafficking, Mexican officials asked ATF for additional information and
intelligence concerning the routes, destinations, and Mexican nationals that
might be involved in firearms trafficking activity.41

       Mexican officials reiterated the need for strategic intelligence on
firearms trafficking during our interviews with them in March 2010. Senior
Mexican law enforcement officials from the Mexico Attorney General’s office
(PGR) and from that office’s intelligence unit (CENAPI) told us that it is
important to their efforts to have more intelligence on how guns are being
trafficked from the United States into Mexico. Mexican military
representatives also said they could achieve better results interdicting guns
if they had more intelligence on where and how guns are crossing the
U.S. border into Mexico, including the routes used to traffic higher-caliber
weapons into Mexico. As described below, we found that ATF has already
developed intelligence products on these and other topics of interest to
Mexican officials.42

       Further, PGR officials stated that PGR develops its own intelligence
about firearms trafficking and Mexican drug cartels, but ATF has not
requested it from PGR, and the two agencies have not shared such
information. Mexican law enforcement officials told us that if there were
more coordination with ATF in developing such intelligence, they would be
able to help identify firearms trafficking trends and patterns on the U.S. side
of the border to assist ATF in its domestic mission.

       Our review found that some of the information sought by Mexican
officials has already been identified as strategic intelligence that ATF can
share with the government of Mexico. For example, ATF’s November 2009
Intelligence Collection Plan includes a list of the existing “actionable
intelligence products” that ATF can share with Mexican law enforcement.
We found that many of these items are the same strategic intelligence
products that Mexican officials have requested but reported that they are

       41  GC Armas is a monthly meeting held at CENAPI headquarters in Mexico City that
serves as the coordinating entity for joint U.S.-Mexico operations related to the detection,
monitoring, and detention of arms trafficking suspects crossing the border. U.S. agencies
that attend GC Armas are ATF, ICE, the DEA, Defense Attaché Office (Department of
Defense), FBI, CBP, Narcotics Affairs Section, and Office of Foreign Assets Control
(Department of the Treasury). Mexican law enforcement agencies in attendance are the
PGR and the PGR’s CENAPI, the Mexican Foreign Ministry, Mexican Military, Mexican Navy,
the Secretariat of Public Security, Customs, and the National Security and Investigation
Center (intelligence agency).

       42 We reviewed other Office of Strategic Intelligence and Information products,

including maps illustrating firearms trafficking corridors, analyses of gun source locations,
and drug cartels’ weapons of choice.


U.S. Department of Justice                                                             29
Office of the Inspector General
Evaluation and Inspections Division
not receiving, such as firearms trafficking routes, safe house locations,
distribution points and destinations, lists of weapons and ammunition being
trafficked, and other documents related to firearms trafficking.

       We asked ATF officials about the sharing of this type of information
with Mexico. ATF responded that its Mexico Country Office has provided
Mexican officials with strategic intelligence on firearms trafficking and has
repeatedly presented the requested intelligence at various venues with
Mexican officials, including at the GC Armas meetings, through EPIC, and
through border liaison personnel detailed to the Office of Strategic
Intelligence and Information. According to ATF, however, there have been
internal coordination problems between government of Mexico agencies,
which we also found through our fieldwork.

       We determined that much of the intelligence ATF cited as having
exchanged with Mexican officials is tactical or investigative in nature, rather
than strategic intelligence. Moreover, some of the exchanges occur
informally, which reduces the utility and availability of the intelligence to
ATF’s Mexican counterparts. For example, ATF cited a border liaison who
provided strategic and tactical intelligence informally to Mexican
counterparts at a local working group. While ATF’s informal information
exchanges with Mexican officials are intended to improve its working
relationship with the government of Mexico and contribute to investigations
on both sides of the border, this process has not resulted in intended
recipients in each Mexican agency receiving important strategic intelligence
or ATF receiving strategic intelligence from Mexican agencies.

ATF’s exchange of strategic intelligence with the DEA and ICE is
inconsistent and lacking in some instances.

       ATF’s Gunrunner strategy states that ATF should work with the DEA
and ICE to shut down firearms trafficking operations. We found that ATF
does not consistently share strategic intelligence about firearms trafficking
with the DEA and ICE. Consequently, ATF and these agencies may be
targeting the same groups and individuals in an uncoordinated manner.

      Project Gunrunner cases target many of the same cartel organizations
that DEA and ICE enforcement operations target. Gaps and failures in the
exchange of intelligence among these agencies create the potential for
duplication of effort, inefficiency, and the risk of operational compromise. A
2008 internal intelligence assessment of Project Gunrunner acknowledged
that ATF’s information about Mexican cartels was “haphazard.”43 The
assessment continued by stating that with more communication and


       43   ATF, 2008 Project Gunrunner Assessment, November 19, 2009.


U.S. Department of Justice                                               30
Office of the Inspector General
Evaluation and Inspections Division
collaboration with other federal law enforcement agencies, “this intelligence
gap will shrink.”

       However, ATF’s Office of Strategic Intelligence and Information has
not established a method to systematically share strategic intelligence with
the DEA. The Office established intelligence liaisons at several federal
agencies, including at the DEA, but the liaisons at the DEA are not assigned
there for the purpose of exchanging strategic intelligence related to firearms
trafficking. Rather, the ATF Chief of the Office’s Criminal Intelligence
Division confirmed that the duties of the ATF’s liaisons assigned to the DEA
are related to the Department’s international organized crime mission, not
Project Gunrunner or the Southwest border. The ATF Chief told the OIG
that it would be helpful if his agency had intelligence from the DEA on the
cartels, especially identified cartel members and weapons they might
possess.

       DEA officials told us they have compiled a large amount of intelligence
on the drug cartels and that the exchange of this intelligence with ATF
would be of great strategic value. However, an official of the DEA’s Mexico
and Central America office, an office that targets drug cartels’ narcotics
operations and complements Project Gunrunner, was unaware of the
existence of a strategic intelligence counterpart organization at ATF’s Office
of Strategic Intelligence and Information. Consequently, the DEA did not
know with whom to coordinate and share information at ATF. The Chief of
Strategic Intelligence added that the DEA needs a counterpart at ATF
because “weapons are a necessary tool of drug traffickers in waging their
wars and battles.”

       ICE officials stated that they would benefit from having ATF strategic
intelligence, such as time-to-crime patterns, types of guns seized in Mexico,
and methods used by traffickers to obtain guns from gun shows or through
straw purchasers at gun dealers. One ICE Special Agent in Charge told us
that this type of intelligence would help ICE better orient its efforts on
smuggling investigations. ICE agents also said they would be able to use
any intelligence ATF offered on trafficking organizations and their practices
in ICE’s efforts to build complex conspiracy cases against firearm
traffickers. ICE officials told us that in exchange, they could provide ATF
with strategic intelligence developed on firearms trafficking to Mexico and on
Mexican drug cartels and their activities.

       Officials from ATF’s Criminal Intelligence Division told us that the
lack of an exchange of strategic intelligence not only hinders ATF’s
effectiveness at gaining valuable intelligence on Project Gunrunner targets,
but also inhibits ICE’s ability to conduct its closely related firearm
interdiction missions.


U.S. Department of Justice                                              31
Office of the Inspector General
Evaluation and Inspections Division
       We asked ATF officials why this strategic intelligence was not being
shared with DEA and ICE officials and why they had not requested such
intelligence from the DEA and ICE. ATF responded that it has shared
strategic intelligence products on firearms trafficking with other U.S. law
enforcement agencies, including the DEA and ICE. However, ATF’s strategic
intelligence counterparts in both the DEA and ICE reported to us that they
have not received this information. As with Mexican law enforcement
officials, we believe that the strategic intelligence sharing process should be
more systematic and that established counterparts in ATF, the DEA, and
ICE should be identified to facilitate the two-way exchange of information in
a timely manner.

ATF shares some tactical intelligence with the DEA and CBP in support of
their respective trafficking investigations, but the benefits have been limited.

       We found that ATF shares some tactical intelligence and coordinates
well with the DEA and CBP in their field operations, but the frequency and
effectiveness of the coordination varies by location. Coordination between
ATF and the CBP has not resulted in significant numbers of seizures of
guns going into Mexico.

       At locations across the Southwest border, ATF and DEA personnel
both reported to us that when the DEA has a lead that pertains to firearms
violations or trafficking, it passes the lead to ATF. For example, in McAllen,
Texas, one ATF supervisor reported that his office receives so many leads
resulting from DEA seizures that it has put a strain on ATF resources in
that city. An ATF Special Agent in Charge of a Southwest border field
division also told the OIG that even though the DEA has not traditionally
done so there, it is beginning to provide ATF with tips related to firearms
trafficking that its personnel hear from wiretaps and other intelligence
sources. ATF had not provided as much of this intelligence to the DEA,
although DEA field staff we interviewed said they were content with the level
of support they were receiving from ATF, especially with ATF’s expertise in
guns.

      An ATF Southwest border Special Agent in Charge told us he
considers CBP staff to be counterparts with whom ATF works well on a
shared mission. ATF intelligence staff in the field and at EPIC also post
“lookouts” into the CBP’s database, which the CBP then uses to identify
vehicles or individuals to search during southbound inspections. When
CBP personnel seize weapons, they either notify ATF or ICE.44



       44 See Part VI of this report for additional information on CBP and ATF coordination
on operations at the border.


U.S. Department of Justice                                                          32
Office of the Inspector General
Evaluation and Inspections Division
      Despite the cooperation, CBP has not seized significant numbers of
guns going into Mexico. According to a Government Accountability Office
(GAO) report on firearms trafficking, although the CBP has increased its
southbound inspections of vehicles to interdict contraband such as guns
going into Mexico, the CBP has been unable to seize many weapons. In
FY 2008, there were only 70 weapons interdicted as a part of southbound
inspections.45 Similarly, an internal DHS report found that in the 9-month
period spanning March 24 to December 28, 2009, the CBP seized only 93
weapons being transported to Mexico through points of entry along the
Southwest border. CBP officials we interviewed told us that gun seizures
are typically the result of the CBP’s incidental inspections – such as random
vehicle searches conducted because of officers’ instincts, canine usage, or
targeted southbound inspections – rather than intelligence provided by ATF.

       CBP officials said that any information ATF collects on the activities of
traffickers to transport guns across the border into Mexico could benefit the
CBP’s implementation of its southbound inspection program. With more
detailed intelligence from ATF on individuals, vehicles, or a large purchase
of guns, the CBP could focus its enforcement operations at specific, relevant
points along the border and interdict guns and other contraband being
trafficked to Mexico.

       Is sum, it is crucial that ATF maintain close partnerships with other
U.S. agencies and the government of Mexico to combat the flow of firearms
to Mexican drug cartels. Although ATF has shared strategic intelligence
products with Mexican and other U.S. agencies, it is not doing so
consistently and systematically. For example, we found that ATF is not
systematically sharing strategic intelligence on cartel firearms trafficking –
including trends and patterns in their operations, where they are operating,
and the composition of their membership and associates – with Mexican law
enforcement, the DEA, or ICE. While ATF regularly shares tactical
intelligence on firearms trafficking suspects and activities with the DEA and
CBP, the benefits to CBP have been limited. We believe ATF could better
combat firearms trafficking if it improved its sharing of strategic intelligence
with its partner agencies.




       45 U.S. Government Accountability Office, Firearms Trafficking: U.S. Efforts to

Combat Arms Trafficking to Mexico Face Planning and Coordination Challenges, GAO-09-709
(June 2009).


U.S. Department of Justice                                                       33
Office of the Inspector General
Evaluation and Inspections Division
Recommendation

       We recommend that ATF:

       1.	   Coordinate with the government of Mexico, the CBP, DEA, and
             ICE to ensure systematic and regular exchanges of strategic
             intelligence to combat firearms trafficking to Mexico.


ATF Southwest border Field Intelligence Groups are not consistently
providing actionable investigative leads to field agents.

       As discussed below, ATF personnel along the Southwest border told
us that agents investigating Project Gunrunner cases are not consistently
receiving timely, actionable intelligence from ATF’s Field Intelligence
Groups.46

Agents investigating Project Gunrunner cases say they are not receiving
timely, actionable leads from their Field Intelligence Groups.

        In our field visits, ATF agents in Southwest border locations said that
the investigative leads provided by ATF’s Field Intelligence Groups are not
timely, well developed, or actionable.47 These complaints referred to leads
developed by the Field Intelligence Group and to leads from developed by
Industry Operations and forwarded by the Group. Field supervisors and
agents told us they do not rely on their Group to generate investigative leads
at all, opting instead to generate their own leads.

       The most commonly stated criticism of the investigative leads from
Field Intelligence Groups was that they were too old to be of value to agents
conducting investigations. For example, field supervisors in one Southwest
border field division told us the primary problem with the Field Intelligence
Group leads is that the information is stale; one field supervisor said the
Group forwards leads involving a time-to-crime of 1 to 3 years, but the

       46  In addition to visiting the Phoenix, Dallas, and Los Angeles Field Divisions during
this review, we visited the Houston Field Division in June 2009 as part of our interim
review of Project Gunrunner. During that visit, agents from the Houston Field Division also
reported that investigative leads were not well-developed or actionable, although some of
the complaints related specifically to investigative leads generated for the Gun Runner
Impact Team initiative, which was under way at that time.

        47 Field Intelligence Groups support field agents in two ways: responding to direct

requests for information from agents to support their cases, and proactive intelligence
gathering to generate investigative leads to be referred to field agents. The criticisms
expressed to the OIG concern these investigative leads. Agents we interviewed told us that
when they requested information from their Field Intelligence Group to support a current
case, they received a timely and useful response.


U.S. Department of Justice                                                             34
Office of the Inspector General
Evaluation and Inspections Division
agents should be focusing on incidents with a time-to-crime of 3 to 6
months. Another field supervisor said the Field Intelligence Group will send
him leads that can have a time-to-crime of up to 3 to 5 years. Although
field personnel varied in what they considered a valuable time-to-crime,
most cited a 1-year time-to-crime as the maximum threshold for a lead to be
useful.

      ATF field supervisors told us that the impact of receiving leads with
an outdated time-to-crime is that agents waste time investigating the leads.
For example, one field supervisor estimated that of about 25 investigative
leads that the Field Intelligence Group sent to his enforcement group during
2009, only 1 or 2 warranted follow-up and neither of those leads resulted in
any arrests or prosecutions. An agent in that enforcement group said that
because the Field Intelligence Groups do not effectively screen leads, each
lead that is assigned by a field supervisor requires an agent to spend time
pursuing it and then to write a report in N-Force explaining that the lead
did not pan out.

       Field supervisors and agents said that they rely more on self-
generated investigative leads and information from other sources to detect
firearms trafficking activity. For example, some agents were using the
weekly compilation of raw data on Mexican crime gun recovery and multiple
sales data provided to the field directly from the National Tracing Center to
conduct their own screening and analysis instead of using the Field
Intelligence Groups.48 ATF’s National Firearms Trafficking Implementation
Plan directs supervisors to review the multiple sales data to identify
potential firearms traffickers “even though the [Field Intelligence Group]
analyzes the data for trafficking leads against locally established criteria.”49
In September 2010, in response to a draft of this report, ATF told the OIG
that field office personnel can quickly review the multiple sales data because
they are more familiar with the local gun dealers, weapons of choice, and
potential firearms trafficking suspects in their area, and they can request
that Field Intelligence Group personnel conduct additional research.
However, by generating their own investigative leads, agents may duplicate
their Group’s efforts. Agents also may use information that is less effective
because they do not have access to the multiple sources used by Groups,
and they do not have the time to conduct additional research that Group
members should do before sending investigative leads to agents.

        48 Agents in the Dallas, Los Angeles, and Phoenix Field Divisions also reported that

in addition to analyzing some of the same sources that the Field Intelligence Group uses, a
primary source of their investigative leads was local gun dealers who call them to report
suspicious activity and confidential informants, a type of source to which Field Intelligence
Groups would not have access.

       49   ATF National Firearms Trafficking Enforcement Implementation Plan (June 25,
2009), 3.


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       ATF field agents also stated that some leads forwarded by a Field
Intelligence Group as Project Gunrunner leads have no clear connection to
firearms trafficking. A field supervisor provided the example of a Group-
generated lead on a gang member in possession of one gun – which the
supervisor does not consider to be a firearms trafficking offense – as a lead
that was not useful. That supervisor said although there is no threshold for
the number of guns associated with a purchaser, a useful investigative lead
from the Group would involve a purchaser with at least two or three guns,
or a suspect who illegally purchased guns with an out-of-state license.
Another supervisor stated that the most useful intelligence for detecting
firearms trafficking is information on the gun purchasers themselves –
including the number and types of guns bought, the age and gender of the
buyers, and background information indicating whether the buyers had the
financial means to buy the guns.

Reporting multiple sales of handguns produces timely, actionable leads for
detecting firearms trafficking.

       The Gun Control Act requires that gun dealers report multiple sales of
handguns (defined as two or more handguns sold at once or during any
5 consecutive business days) to ATF.50 As discussed below, these multiple
sales reports provide ATF with timely, actionable leads that can enable it to
more quickly identify suspected firearms traffickers and disrupt their
operations.51 However, gun dealers are not required to report multiple sales
of long guns to ATF.52 Because long guns have become Mexican cartels’
weapons of choice, multiple sales reporting has become less viable as a
source of intelligence to disrupt the illegal flow of weapons to Mexico.

      According to 18 U.S.C. § 923(g)(3), gun dealers must report multiple
sales of handguns to their local ATF field office using a Report of Multiple
Sales or Other Disposition of Pistols and Revolvers form (multiple sales
report). Gun dealers must forward all multiple sales reports to the National
Tracing Center by the close of business on the day that a reportable
multiple sale occurs. The National Tracing Center enters the information on
the multiple sales into ATF’s tracing database (the Firearms Tracing
System), which is subsequently made available to ATF field offices through



       50   18 U.S.C. § 923(g)(3).

       51 For more information on potential indicators of trafficking by gun dealers, see

Bruce Reinhart, “Implementing a Firearms Trafficking Strategy – Prosecuting Corrupt
Federal Firearms Licensees,” United States Attorneys’ Bulletin (January 2002).

       52   Long guns include all variations of rifles and shotguns as defined in §§ 921(a)(5)
to (8) of the Gun Control Act.


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eTrace. If a trace request is matched to multiple sales report information,
the trace can be completed in minutes rather than days or weeks.53

      The purchase of multiple guns within a short period of time by an
individual who is not a gun dealer may indicate that the individual is
engaged in firearms trafficking. For example, firearms trafficking indicators
include:

          multiple sales in which a purchaser also appears on one or more
           past gun traces;
          multiple sales in which the purchaser was born outside the
           United States;
          a multiple sale of five or more guns;
          more than one multiple sale at the same gun dealer on the same
           day;
          traces in which the recovered gun was purchased in a multiple
           sale; and
          crime guns traced back to a multiple sale in a state other than
           where a gun was recovered.

      Additionally, ATF uses multiple sales reports to verify gun dealers’
records, to detect suspicious activity, and to generate investigative leads.
ATF personnel we interviewed in Southwest border offices cited multiple
handgun sales data as a valuable source of timely and actionable
investigative leads for detecting firearms trafficking and said such leads
have led to the prosecution of traffickers.

Multiple sales reporting is a less viable source of intelligence on firearms
traffickers because multiple sales of long guns are not reported.

       Multiple sales of long guns are not subject to the same reporting
requirements as handguns. Yet, long guns have become the Mexican
cartels’ weapons of choice. ATF reported in a statement to Congress last
year:

       Until recently drug traffickers’ “weapon of choice” had been
       .38 caliber handguns. However, they now have developed a
       preference for higher quality, more powerful weapons, such as

         53 If a gun is not a part of a multiple sales report, then the National Tracing Center

uses the gun identifying information (such as the serial number and model) to determine
the manufacturer or importer of the gun. The manufacturer or importer then can provide
the name of the licensed gun dealer the first sold the gun. The National Tracing Center
contacts that licensed gun dealer who checks their records to determine who the gun was
first sold to. According to National Tracing Center staff, the length of time this process
takes varies widely, but is usually about 7 to 10 days.


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       .223 and 7.62x39mm caliber rifles, 5.7x28 caliber rifles and
       pistols, and .50 caliber rifles; each of these types of weapons
       has been seized by ATF in route to Mexico.54

      The OIG’s analysis of National Tracing Center data of Mexican crime
guns recovered from FY 2004 through FY 2009 confirmed the increase in
the use of long guns by Mexican drug cartels. During this time,
the percentage of crime guns recovered in Mexico that were long guns
steadily increased each year from 20 percent in FY 2004 to 48 percent in
FY 2009. By contrast, handguns represent a steadily decreasing portion of
crime guns recovered in Mexico, dropping from 79 percent in FY 2004 to
50 percent in FY 2009. In FY 2009 long guns and handguns were recovered
at almost the same rate.

      Our analysis also found that long guns tend to have a shorter time-to­
crime than handguns, and shorter time-to-crime intervals generate more
valuable leads for ATF. According to Mexican crime gun data provided by
ATF, of Mexican crime guns that were both sold for the first time and traced
between December 1, 2006, and December 31, 2009, 973 were rifles
(77 percent) and 279 were handguns (23 percent).

      Evidence also indicates that Mexican cartels are obtaining long guns
in multiple sales. The case study in the text box below demonstrates how
high volumes of trafficked long guns can be obtained through multiple gun
purchases. In that particular case, a trafficking ring purchased at least 336
weapons, of which the OIG determined through ATF data that 251
(75 percent) were long guns. Of the 251 long guns, all but 1 were
purchased as a part of multiple sales, and these sales would have been
reportable to ATF had they been handguns. According to ATF and other
Department personnel, this case is one of many ATF cases involving
multiple purchases of long guns.

       While long guns are increasingly the Mexican cartels’ preferred gun,
there is no legal requirement in the United States to report multiple sales of
these weapons. As a result, multiple sales reporting has become less viable
to ATF as a source of intelligence to identify firearms trafficking
organizations and disrupt the illegal flow of weapons to Mexico. For
example, in the case described below, had there been a multiple sales
reporting requirement on long guns, this case could have been initiated
soon after March 13, 2006, when the first multiple purchase of a long gun
took place (three AR-15 assault rifles along with two boxes of ammunition
valued at $3,347). Instead, ATF did not initiate its investigation until mid­

      54 William Hoover, Assistant Director for Field Operations, ATF, before the

Committee on the Judiciary Subcommittee on Crime and Drugs, U.S. Senate, concerning
“Law Enforcement Responses to Mexican Drug Cartels” (March 17, 2009).


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2007, over 1 year later, when ATF Industry Operations Investigators
identified the trafficking ring through the inspection of a gun dealer.

                      A Case Study of a Firearms Trafficking Ring

        In a statement to Congress on March 4, 2010, ATF’s Deputy Director described a
case in which straw purchasers bought and trafficked firearms for the Gulf Cartel in
Mexico. The firearms trafficking ring consisted of 23 suspected traffickers who purchased
guns and other gear out of Houston from March 13, 2006, to June 5, 2007. The ring
purchased at least 336 firearms, of which 251 were long guns. These included .223, 7.62,
and 5.7 caliber rifles. All but one of the long guns were purchased in multiple sales. For
example, one of the suspects purchased 14 long guns, all weapons of choice, in 1 day from
1 firearms dealer. Of those 14 long guns, 2 were recovered in Mexico with a time-to-crime
of under 2.5 years. Table 2 provides additional facts about this case.

                   Table 2: Impact of One Firearms Trafficking Ring

  Suspects             23 suspects
  Time frame           March 13, 2006, to June 5, 2007; 15 months
  Purchases            96 purchases from 10 firearms dealers
  Value                $367,419 total in merchandise, paid mostly in cash
  Sales                Individual purchase totals ranged from $2,037 to $42,726
  Firearms             336, plus ammunition, scopes, and other gear
  Long guns            251 long guns purchased
  Mexico recoveries    91 of the 336 total; 87 were long guns
  Traces               21 of the 23 suspects have had traces linked to them
  Time-to-crime        Median for the 87 long guns just under 1.5 years
      Shortest         26 days
      Longest          3 years 10 months
                       57, including 18 law enforcement officers and civilians, plus 39
  Deaths
                       gunmen
Source: ATF Houston Field Division.

        As of June 2010, ATF had shut down the firearms trafficking ring. Eleven of the
traffickers had been convicted of various offenses, with sentences ranging from 3 months’
to 8 years’ imprisonment. The individual who was sentenced to 8 years had purchased
firearms that were associated with eight murders in Mexico.

        If multiple sales reporting of long guns was required, ATF would have had
investigative leads to identify the trafficking ring earlier. Such reports also would have
flagged the buyers’ previous multiple purchases, and ATF could have sought cooperation
from the straw purchasers to identify the Gulf Cartel members responsible.

      Because reporting multiple sales of handguns generates timely,
actionable investigative leads for Project Gunrunner, and because long guns
have become Mexican cartels’ weapons of choice, we believe that the
reporting of multiple sales of long guns would assist ATF in identifying
firearms trafficking suspects. Our analysis shows that many long guns
seized in Mexico have a short time-to-crime and were often a part of a
multiple purchase. We therefore believe that mandatory reporting of long

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gun multiple sales could help ATF identify, investigate, and refer for
prosecution individuals who illegally traffic long guns into Mexico.

Recommendation

       We recommend that ATF:

       2.	   Work with the Department to explore options for seeking a
             requirement for reporting multiple sales of long guns.


Field Intelligence Groups lack consistent criteria for developing leads and
have limited capability to monitor lead outcomes.

       We examined how analysts in the Field Intelligence Groups process
information to develop leads and how Group managers monitor the work of
the analysts to assess the quality and usefulness of the leads they produce.
As described in the following sections, there are no minimum national
standards for Field Intelligence Groups to use in determining which leads to
forward to agents, and the Groups in the four Southwest border field
divisions vary in their development of localized standards for screening
potential leads. Further, we found ATF’s management information systems
do not enable Field Intelligence Group managers to readily assess the
outcomes of the leads sent to the criminal investigators for action.

ATF lacks clear criteria for Field Intelligence Groups to use in screening leads.

       ATF has not established general guidelines or thresholds for Field
Intelligence Groups to screen investigative leads to ensure that ATF agents
receive only relevant leads that do not require agents to conduct further
research. ATF Order 3700.2A, “Criminal Enforcement Intelligence Program
Standard Operating Policies and Procedures” (October 2004), provides
general guidance on reporting, collecting, maintaining, and disseminating
criminal law enforcement and national security information, as well as
intelligence staff responsibilities. However, the Order does not provide any
guidelines for field intelligence personnel to follow in determining how to
develop, screen, and analyze information to create actionable investigative
leads for agents.

       In February 2005 and again in February 2008, ATF issued criteria for
referrals from Industry Operations and further required that management in
each field division “meet and establish criteria for the type and scope of
criminal information which is of interest to both ATF law enforcement and




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the [USAO].”55 However, these criteria apply only to referrals generated by
Industry Operations groups, not to referrals generated within the Field
Intelligence Groups or by other entities. Similarly, ATF’s National Firearms
Trafficking Implementation Plan does not establish criteria for referrals
generated within the Groups.

       The most specific standards for investigative leads produced by Field
Intelligence Groups are found in the ATF Field Intelligence Group
Supervisor’s Guide Book. The Guide Book states that Intelligence Research
Specialists assigned to Groups are to collect, evaluate, and analyze
intelligence to produce “finished tactical and operational analytical
products.”56 These products are defined as an “analytical product resulting
from cognitive effort wherein the intelligence research specialist explains
findings, discloses links, recognizes patterns of activity, and makes
predictions or recommendations.” However, the Guide Book does not
describe how field intelligence personnel are to do this.

      We discussed with Southwest border Field Intelligence Group
employees and supervisors how they determine what leads are of potential
value to field agents in the absence of agency criteria for them to use in
determining how to handle leads. They use some type of threshold to
determine whether a lead should be forwarded to field agents, or not
forwarded, but the thresholds were primarily focused on Industry
Operations referrals and were not tailored to the needs of the enforcement
groups served by Field Intelligence Groups. Specifically:

       1. The Dallas Field Division established written criteria for screening
          referrals of information from Industry Operations in January 2006
          in response to ATF instruction to do so.
       2. The Phoenix Field Division established a written plan and criteria
          to screen referrals of information from Industry Operations In
          February 2009.
       3. The Houston Field Intelligence Group did not have written criteria
          for screening referrals of information from Industry Operations but
          reported using a list of six factors to determine which to refer to
          agents.
       4. The Los Angeles Field Division reported that it did not have criteria
          at the time of our site visit in January 2010, but subsequently
          developed “referral criteria” on the types of violations and

       55 Assistant Director, Enforcement Programs and Services, ATF memorandum to all

Special Agents in Charge and all Directors, Industry Operations, Referrals of Information,
February 22, 2005, and ATF Industry Operations Handbook, Handbook 5030.2C (February
2008), 117.

       56   ATF, Field Intelligence Group Supervisor’s Guide Book (September 2009),
Appendix.


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          information that must be referred to agents through the Field
          Intelligence Group.

Only one Group (the Dallas Field Division) included criteria designed to
screen out leads that did not meet the prosecutorial guidelines of the
division’s USAOs.

        We concluded that the field divisions did not provide sufficient
guidance to intelligence personnel about how to develop and screen
intelligence to meet the requirements of the enforcement groups. Two field
supervisors and Field Intelligence Group members we interviewed cited a
variety of standards for determining whether particular pieces of
information should be forwarded to enforcement groups as leads. For
example, one Intelligence Research Specialist cited three criteria used by her
Group to ensure that investigative leads sent to field offices are valuable,
emphasizing that the goal is to forward only “actionable” intelligence, which
she defined as “information that could help an agent in some way.” The
criteria cited by that Intelligence Research Specialist were that leads be:
(1) original, meaning not already under investigation by another office;
(2) timely – so that the agent can be relatively assured that the suspect is
still retrievable; and (3) of federal interest, with leads that are better suited
for state and local law enforcement referred there rather than to ATF field
offices.

       A member of a different Field Intelligence Group stated that the goal is
to give agents as much information as possible about a suspect. That
Group member said that he relies on his instincts and considers factors
such as the time-to-crime of a gun trace. He also stated that if the time-to­
crime is within 2 years he automatically sends the lead, but if it is older
than 2 years, he may not. We noted that this is not consistent with the
need for more recent time-to-crime leads generally described to us by
agents. A Group supervisor in another division stated that the analysts are
expected to use discretion when screening information to eliminate the
“white noise” and provide the most relevant information to the field.

      Some Field Intelligence Group supervisors and members told us that
they knew some leads they provided had no likely investigative value to
agents. One supervisor commented, “A lot of times, the agents in the field
can’t work that referral . . . most likely it won’t lead to a prosecution . . . .”
That supervisor believed the information to be valuable nonetheless because
it added to other information that the agents are receiving. Regarding the
time-to-crime of a gun trace, the supervisor said the Group forwards
investigative leads to the field on any gun recovered in Mexico with a time-
to-crime of 1 year or less. An Intelligence Research Specialist assigned to
that Group told us that referrals sent to field agents are often not adequate
and have little investigative potential when the time-to-crime is longer than

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1 year. Other Group members who said that some leads on Mexican crime
guns had no investigative value stated that many of those leads were based
on information that was outdated when the Group received it.

Field Intelligence Group managers cannot effectively monitor the quality or
status of Industry Operations leads referred to enforcement groups.

       In discussing the quality of leads with Field Intelligence Group
supervisors, we found that they have limited capability to monitor the
referrals they receive from Industry Operations and to obtain feedback on
the results of leads their Groups provide to agents.57 ATF requires Field
Intelligence Groups to monitor the timeliness of their processing of referrals
they receive from Industry Operations, including whether they accept or
reject each referral, and to provide quarterly reports on the status of
referrals. The Groups are also required to monitor the status of referrals
that are accepted and forwarded to enforcement groups. Enforcement
groups receiving referrals from Field Intelligence Groups are required to
annotate in N-Force, within 30 days, if no investigative activity has
occurred. This is so that field offices, which have access to N-Force, can
assess their effectiveness through performance measures such as how many
referrals were made under which statute, the number of criminal cases
initiated because of referrals, and case outcomes. ATF further emphasized
the importance of referrals in the 2009 National Firearms Trafficking
Implementation Plan by adding a performance measure to evaluate the
quality of referrals sent to Criminal Enforcement.

       However, both Field Intelligence Group supervisors and Industry
Operations Area Supervisors told us that tracking the disposition of
referrals and providing feedback is cumbersome because ATF’s enforcement
and industry operations databases (N-Force and N-Spect) are not integrated
and because agents can access only N-Force and Industry Operations
Investigators can access only N-Spect. The Chief of ATF’s Office of Strategic
Management, which is responsible for ATF data management, stated that
because the N-Spect and N-Force systems are not linked electronically,
when Industry Operations makes a referral to Criminal Enforcement, the
referral is made “off line” – by e-mail, hand delivery, or regular mail. After
the referral is made, the N-Spect file is closed, and there is generally no
reporting on the progress of the referral.

      Because the referral process is not automated, each referral is
forwarded on a printed form, and Field Intelligence Group supervisors track

        57 ATF Order 3700.2A defines intelligence feedback as “interaction between

consumers of finished intelligence and the producers to help intelligence managers evaluate
the effectiveness of intelligence support, identify intelligence gaps, and focus more precisely
on consumer needs.”


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referrals using individually developed spreadsheets into which they enter
information. This information includes the date of the lead, its source
(Industry Operations or other), the enforcement group to which it was sent,
and the status of the lead – that is, whether it was closed or an agent was
assigned to it and pursued the lead. To obtain outcome data for the
spreadsheets, the supervisors search N-Force and manually retrieve the
data, which some said was time-consuming. For example, one Group
supervisor told us that to produce the required quarterly status reports, he
must search all “open” referrals in N-Force, update the disposition field for
every active referral on his spreadsheet, and forward the updated
spreadsheet to the Industry Operations Area Supervisor. That supervisor in
turn must access N-Spect and update the disposition of each open referral
in that system.

       In addition, we observed that the information in Field Intelligence
Group supervisors’ spreadsheets did not contain feedback from enforcement
groups about the utility of the investigative leads the Group provided,
whether from Industry Operations or leads developed by the Field
Intelligence Group itself. Agents enter information into N-Force using drop-
down menus that contain generic reasons for closure of a lead. The agents
can also provide specific feedback on the lead in an open comment field.
However, we were told that agents did not often enter into N-Force the
specific reasons that a lead was not useful, such as why it did not meet
prosecutorial guidelines or how it could have been improved. Some field
personnel told us that they may request specific feedback on their leads
directly from agents and field supervisors, particularly in offices where the
agents and Groups are co-located. Nonetheless, we concluded that tracked
information was not effective in allowing the Group supervisors or members
to assess the utility of the leads they provided to agents or to provide
Industry Operations with specific feedback on their referrals.

        The difficulty of determining referral outcomes was demonstrated by
the efforts ATF undertook to provide the OIG with a limited sample of the
outcome of Industry Operations referrals to Criminal Enforcement through
Field Intelligence Groups. In December 2009, we requested the number of
Industry Operations referrals to Criminal Enforcement through Field
Intelligence Groups from FY 2004 through FY 2009, and their outcomes
(whether the referrals were accepted and how many resulted in a criminal
investigation). In April 2010, ATF headquarters provided data that indicated
5,106 referrals were made by the four field division Field Intelligence Groups
in the stated period. We determined that 476 of those referrals were
(1) firearms-related, (2) referred within ATF, and (3) shown as “accepted” in




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N-Force.58 In May 2010, we asked the Office of Strategic Management to
provide us the N-Force case management log entries for a random sample of
213 cases. That data was finally provided on August 4, 2010.

       When asked why the process had taken so long, the Chief of ATF’s
Office of Strategic Management, which is responsible for ATF data
management, stated it took months to research and to document the
specific referral outcomes because of limits in ATF’s case management
system. Staff in ATF’s Field Operations Office had to research each
individual referral to locate and document the outcome information. The
Chief stated that ATF has annually sought funding needed to modernize its
case management system, but that the requests have been disapproved.59

Recommendations

       We recommend that ATF:

       3.	   Ensure that each Southwest border firearms trafficking
             enforcement group develops and regularly updates guidelines for
             their Field Intelligence Group that specify the most useful types
             of investigative leads.

       4.	   Develop an automated process that enables ATF managers to
             track and evaluate the usefulness of investigative leads provided
             to firearms trafficking enforcement groups.


ATF intelligence personnel are not adequately sharing firearms
trafficking information with each other to develop or enhance
intelligence to further investigations.

      Despite the importance of intelligence to Project Gunrunner’s mission,
we found that sharing of firearms trafficking-related information and
techniques among intelligence personnel in Southwest border locations and
in the Mexico Country Office is limited.



       58 We excluded referrals sent to other federal, state, and local law enforcement
agencies as these entities are not required to provide ATF with status reports on the
outcomes of the referrals.

        59 Budget documents show that ATF has requested funds to improve various

N-Force and N-Spect capabilities since at least FY 2004. In its FY 2012 budget request,
ATF requested $3.3 million for this purpose. Proposed improvements include providing a
single entry point for all investigative and inspection information and reducing data
redundancy. As of August 2010, ATF had not received funds to upgrade N-Force and
N-Spect for this purpose.


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Routine sharing of information among intelligence personnel is limited.

       ATF Order 3700.2A directs Intelligence Research Specialists to
“routinely interact with their counterparts in other field divisions, and
conduct liaison with analysts from other law enforcement agencies and the
Office of Strategic Intelligence and Information.”60 The ATF Office of
Strategic Intelligence and Information subsequently created an Intelligence
Collection Plan to establish information collection and exchange procedures
for Project Gunrunner, including intelligence that may be shared with
Mexican officials. The Plan states that to develop “real-time, actionable
intelligence relating to firearms trafficking networks operating in both the
United States and Mexico,” ATF field offices will establish procedures to
collect information from a variety of sources, including “exchanging
information with other ATF field offices . . . .” ATF’s National Firearms
Trafficking Enforcement Implementation Plan, sent from the Acting
Assistant Director (Field Operations) to all Special Agents in Charge on
June 25, 2009, mandated that the Intelligence Collection Plan be provided
to, and “thoroughly reviewed by,” all Field Intelligence Group personnel by
July 31, 2009. ATF also established the requirement for Field Intelligence
Group communications in its June 2007 Gunrunner strategy, which stated,
“ATF [Field Intelligence Groups] need to coordinate inter- and intra-division
intelligence activities much like operational activities.”61

       During our fieldwork, we interviewed 11 intelligence personnel in
Southwest border field divisions and Mexico City, as well as 4 of their
supervisors. We determined through those interviews that routine
communication between Field Intelligence Groups primarily occurs at the
supervisory level. Southwest border Field Intelligence Group supervisors
participate in quarterly teleconferences with their counterparts in the
Western region and ATF headquarters intelligence personnel from the Office
of Strategic Intelligence and Information to share information on
investigations and trends related to firearms trafficking. The supervisors
also told us that, although each Group pursues cases separately, the
supervisors contact each other when they need to and share information
pertaining to cases or investigative referrals with other Field Intelligence
Groups. However, we determined that non-supervisory Group members do
not participate in these exchanges.

      Non-supervisory intelligence personnel in these offices told us that
they rarely receive information from their counterparts in other Southwest
border field divisions and that they communicate with these counterparts

       60 ATF Order 3700.2A, “Criminal Enforcement Intelligence Program Standard

Operating Policies and Procedures” (October 2004), 12.

       61   ATF, Southwest Border Initiative: Project Gunrunner (June 2007), I-13.


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infrequently. In addition to the lack of communication across Field
Intelligence Groups, non-supervisory staff members told us there is limited
interaction and poor communication internal to the field division – both
among Field Intelligence Group members and with non-Group members
working on Project Gunrunner, such as agents and Industry Operations
Investigators. In our interviews, we were told that intelligence personnel are
typically excluded from meetings with agents. An Intelligence Research
Specialist in one Field Intelligence Group said the Specialists are not
included in meetings with agents and do not receive the information they
need to effectively support the cases the agents are working on. This
Specialist stated that the Intelligence Research Specialists should not be
overlooked by agents as they perform additional research to supplement the
information provided to agents to support their cases.

      An Intelligence Research Specialist in another Field Intelligence Group
said that because personnel working on Project Gunrunner – including
agents, Intelligence Research Specialists, and Industry Operations
Investigators – do not all communicate, they do not understand each other’s
responsibilities. Further, she said intelligence personnel were missing
opportunities to regularly share firearms trafficking-related information and
analytical techniques with their intelligence peers that they told us would be
useful to them.

       Field Intelligence Group supervisors, Office of Strategic Intelligence
and Information staff, and Mexico Country Office personnel also told us that
they believed there is a need for more communication between Field
Intelligence Groups. For example, a Southwest border Group supervisor
stated that it would be beneficial to have one-on-one meetings between Field
Intelligence Group supervisors and the Intelligence Research Specialists
working on Project Gunrunner cases to discuss the available information
and to coordinate with each other. Similarly, Office of Strategic Intelligence
and Information officials told us that Field Intelligence Groups are
responsible for communication and deconfliction across divisions and
therefore the Groups need to increase the information flow between them.
An Assistant Attaché in ATF’s Mexico Country Office also stated that
communication between Southwest border Field Intelligence Group
personnel needed to be improved to increase the flow of information to
Mexico.

       We were told by Southwest border intelligence personnel that non-
supervisory intelligence personnel have not been included in cross-division
Field Intelligence Group conferences. Intelligence Research Specialists we
interviewed stated that attending such conferences would enable them to,
for example, identify regional and national needs, inform ATF managers
what resources the intelligence personnel need to accomplish their job, and
allow the personnel to share best practices. Several Group members stated

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that this type of collaboration with each other would help the Groups to
operate more efficiently and to better support agents’ needs.

       ATF officials told us of two recent conferences held by the Office of
Strategic Intelligence and Information. The first was a national Field
Intelligence Group conference in August 2009 with an agenda that included
intelligence requirements and analysis of firearms trafficking. However, that
conference was limited to Group supervisors, Assistant Special Agents in
Charge, and Special Agents in Charge. Non-supervisory intelligence
personnel were excluded. The second national Field Intelligence Group
conference, held in August 2010, included non-supervisory intelligence
personnel, but ATF officials told us the conference was not focused on
Project Gunrunner or Southwest border issues.

ATF border liaisons are not effectively coordinating with ATF’s Mexico
Country Office.

       The Border Liaison Program is a key element of Project Gunrunner’s
information sharing strategy. ATF’s June 2007 Project Gunrunner strategy
states that each Southwest border field division will assign a special agent
to act as border liaison in the respective division area of operation. The
strategy states that border liaisons “will be the front line of [the Project
Gunrunner] initiative, attacking the issues on the ground level. In their
areas of operation, they will be responsible for driving the collection and
subsequent dissemination of actionable investigative intelligence through
the Project Gunrunner structure.”62

       Designated border liaisons in each Southwest border field division are
required by ATF’s Intelligence Collection Plan to share firearms trafficking
intelligence with both EPIC and the Mexico Country Office. Further, ATF’s
Gunrunner strategy states that all ATF activities in Mexico should be
coordinated through the Mexico Country Office at the U.S. Embassy in
Mexico City. The Gunrunner strategy states that “failure to coordinate all
ATF official activities can cause serious problems for all personnel in
country and for TDY personnel requiring country clearance or other
diplomatic assistance.”63 Mexico Country Office staff also stated that it is
vital for them to be aware of all discussions and agreements between border
liaisons and Mexican officials so that ATF’s position and response are
uniform.

      However, we found the border liaisons were not effectively
coordinating with the ATF Mexico Country Office. Staff in the Mexico

       62   ATF, Southwest Border Initiative: Project Gunrunner (June 2007), 12.

       63   ATF, Southwest Border Initiative: Project Gunrunner (June 2007), 5.


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Country Office told us that border liaisons had frequently been traveling
back and forth to Mexico and holding discussions with Mexican officials
without the required coordination.64 We were told that key firearms
trafficking intelligence collected by border liaisons and outcomes of
meetings between border liaisons and Mexican officials were not
consistently shared with the ATF Mexico Country Office, which created
problems. For example, border liaisons told Mexican officials that ATF
would be able to provide them with requested training, but the Office was
unaware of the obligation and unable to provide the training. Mexico
Country Office staff told us, “We want to make sure we can deliver what’s
promised to the Mexicans. It’s a coordination issue.”65

       Another ATF Assistant Attaché described the border liaison process as
“disjointed” and informal. He noted that the Border Liaison Program is new
for ATF and that ATF officials “need to work the kinks out.” Although he
explained that the border liaisons contact him when they need something,
he told us that some field divisions’ liaisons are more proactive than others.
Yet another Assistant Attaché told us he does not even know who the border
liaisons are in ATF or what they are doing and he “never hears from them.”

       ATF Mexico Country Office officials told us that they believe the
problems stemmed from a lack of direction governing the information
exchange and communication protocols for border liaisons. One Assistant
Attaché said he has tried on multiple occasions to convene a meeting with
all border liaisons to devise a strategy for intelligence exchange between the
border liaisons and the Mexico Country Office, but has not been successful.
That Assistant Attaché said, “[Mexico Country Office] has an overall strategy
in Mexico and would like to have an overall strategy ATF-wide . . . then
[border liaisons] would fit within that strategy.” According to the Mexico
Country Office, a coordinated approach has been difficult to develop
because the liaisons report to their respective field divisions, while the
Mexico Country Office is organizationally aligned under the International
Affairs Office at ATF headquarters.



       64 Border liaisons told us they often coordinate with the Mexico Country Office
representative at the location closest to them. For example, the border liaison in the
San Diego Field Office might contact the Assistant Attaché assigned to the consulate in
Tijuana, Mexico.

       65 During our site visit in March 2010, Mexico Country Office staff indicated that

ATF created rules requiring border liaisons to contact Mexico City in advance of any travel
to Mexico and that since the rules were established, communications have improved.
However, when we inquired about those rules, the Chief of ATF’s International Affairs Office
reported that ATF does not currently have a directive addressing border liaisons but that
border liaisons will be addressed in a Foreign Operations Order, which was still being
drafted as of July 2010.


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       We examined the direction given to the border liaisons and found that
one reason for the lack of coordination may be that the duties of the border
liaison position have not been well defined. Only the Phoenix Field Division
has established a written description of qualifications and responsibilities
for its border liaisons. According to that description, prior to any meetings
in Mexico the border liaisons were to advise their supervisors of the
intended travel and receive prior approval from their Assistant Special Agent
in Charge or Special Agent in Charge. The description states that it is the
Phoenix Field Division’s responsibility to ensure that the Mexico Country
Office is made aware of any significant liaison activities in Mexico prior to
assistance being rendered. The description also requires liaisons to
document their activities in N-Force at the end of each month for review and
to forward the information to the Mexico Country Office and International
Affairs Office (at ATF headquarters). ATF provided us no additional
information on the roles or responsibilities of its border liaison personnel at
other Southwest border field divisions.

       In sum, we found that ATF has not established minimum
expectations for border liaisons’ information sharing role with the
government of Mexico, the ATF Mexico Country Office, or within their own
field divisions. While variation in the role of liaisons in different field
divisions is to be expected, we believe that ATF should establish minimum
expectations for the border liaisons to ensure that they effectively coordinate
their actions in Mexico with ATF’s Mexico Country Office.

Recommendations

       We recommend that ATF:

       5.	   Develop and implement procedures for Southwest border
             intelligence personnel to routinely exchange intelligence-related
             information in accordance with ATF Order 3700.2A and the
             Intelligence Collection Plan.

       6.	   Develop a method for Southwest border intelligence personnel to
             regularly share analytical techniques and best practices
             pertaining to Project Gunrunner.

       7.	   Formalize a position description that establishes minimum
             expectations regarding the roles and responsibilities of border
             liaisons.




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                    PART III: ATF INVESTIGATIVE FOCUS 



       ATF has not focused its enforcement efforts on complex
       conspiracy investigations with multiple defendants, which
       are the type of cases that can best disrupt firearms
       trafficking rings. Further, ATF is not fully utilizing the
       OCDETF Program to investigate complex conspiracy
       firearms trafficking-related Project Gunrunner cases.
       Because firearms trafficking is not specifically prohibited
       by any federal statute, when ATF does identify trafficking
       operations, it must use other charges – such as providing
       false information on a federal form – that may be difficult
       to prove, result in fewer prosecutions by USAOs, or carry
       low penalties. As a result, USAOs often decline ATF’s cases
       that are based on the most commonly used statutes at a
       higher rate than other Project Gunrunner cases.


Project Gunrunner’s focus has remained on gun dealer inspections and
straw purchaser investigations rather than targeting higher-level
traffickers, smugglers, and recipients of firearms.

        As in other types of organized crime, leaders of firearms trafficking
rings typically conspire to commit a series of crimes and deploy lower-level
members to carry out those crimes. Although Project Gunrunner has
initiated and referred more individual cases for prosecution, as discussed in
Part I of this report, those cases mostly involve straw purchasers and
corrupt gun dealers, not those who organize and command the trafficking
operations. ATF does not measure the number of complex conspiracy cases
it initiates or refers for prosecution, but our analysis found that 68 percent
of Project Gunrunner cases referred to USAOs for prosecution through the
end of FY 2009 were single defendant cases. ATF personnel in one field
division told us that they felt that their management discouraged them from
conducting the kinds of complex conspiracy cases that can target higher-
level members of trafficking rings.

Firearms trafficking conspiracies can involve multiple violations of U.S. law.

      Although no federal law specifically prohibits firearms trafficking, the
members of trafficking rings typically violate federal firearms and export
laws when obtaining and smuggling guns to Mexico. Straw purchasers
commit a criminal act by lying on the federal Firearms Transaction Record
(Form 4473), which requires purchasers to certify that they are not buying
the guns on behalf of others before a gun dealer can sell them the guns.
“Prohibited persons” commit criminal acts by obtaining weapons at gun

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shows that they are not allowed to possess because, for example, they have
criminal convictions or are illegal or nonimmigrant aliens.66 The act of
paying others to illegally purchase and supply guns also is a violation of
18 U.S.C. § 922(a)(1)(A), which is one of the most common statutes under
which ATF’s Project Gunrunner cases are prosecuted, as discussed later in
this Part of the report. Smuggling illegally obtained guns across the border
into Mexico is a violation of 18 U.S.C. § 554, a statute under which ICE
cases are typically prosecuted.67 And while the violent criminal activities of
the cartels in Mexico do not fall under U.S. law, the United States can
extradite traffickers from Mexico and prosecute them for any crimes they
have committed in the United States.

       Although the members of firearms trafficking rings typically conspire
to commit crimes in the United States when obtaining and smuggling guns
to Mexico, we found that Project Gunrunner is aimed primarily at the initial
sellers and purchasers of guns, not at those who direct and most profit from
the trafficking. USAO and ATF personnel we interviewed stated that Project
Gunrunner cases rarely pursue those who request and pay for the guns.
Although typically these cases pursue one or two suspects, others –
including those orchestrating the conspiracy – usually escape prosecution.
This low-level investigative focus is discussed in ATF’s 2009 National
Firearms Trafficking Enforcement Strategy and the accompanying
Implementation Plan, which emphasize investigations of gun dealers with
firearms trafficking indicators, gun shows, flea markets, unlicensed dealers,
and straw purchasers.

ATF has not focused enforcement efforts on complex conspiracy cases
involving multiple defendants.

      The OIG’s analysis of all Project Gunrunner cases that ATF referred to
USAOs for prosecution from FY 2004 through FY 2009 found that the
majority (68 percent) involved only 1 defendant (see Table 3). Only
5 percent of the cases had more than 6 defendants, and 2 percent had more
than 10 defendants. Overall, the average number of defendants per case
was 2.03.



       66   18 U.S.C. § 922(g) lists nine categories of prohibited persons.

       67 18 U.S.C. § 554 states that whoever fraudulently or knowingly exports or sends

from the United States, or attempts to export or send from the United States, any
merchandise, article, or object contrary to any law or regulation of the United States, or
receives, conceals, buys, sells, or in any manner facilitates the transportation,
concealment, or sale of such merchandise, article or object, prior to exportation, knowing
the same to be intended for exportation contrary to any law or regulation of the
United States, shall be fined under this title, imprisoned not more than 10 years, or both.


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          Table 3: ATF Project Gunrunner Cases and Defendants

                                                Number            Percentage
                                                of Cases           of Cases
 Cases with 1 defendant                             693               68%
 Cases with 2 defendants                           150               15%
 Cases with 3-5 defendants                         118               12%
 Cases with 6-10 defendants                         35                3%
 Cases with more than 10 defendants                 19                2%
 Totals                                          1,015              100%

Source: ATF N-Force data.

       AUSAs in Southwest border locations told us that directing the efforts
of Project Gunrunner toward building larger, multi-defendant conspiracy
cases would better disrupt the trafficking organizations. For example, one
AUSA discussed the benefit of pursuing the top of the trafficking
organizations, although he said he did not receive many of those cases from
ATF. He stated:

       Are there 15 or 20 guys told to go out and buy 1 gun [each]
       which are [then] collected at one point? Can we find that
       collector, the one who is actually gathering up the stuff? Where
       is the money coming from? . . . If you answer those questions,
       then you can start making some progress in terms of fighting
       guns going south.

Other AUSAs told the OIG that they also had a strong preference for larger,
complex conspiracy cases.

       In our interviews with agents in one Southwest border field division,
we found that a contributing factor to ATF’s lack of multi-defendant cases
was the approach of field supervisors. ATF staff in this field division told us
they felt discouraged from conducting complex conspiracy cases. Agents we
interviewed told us that after investigating the lower ranking members of a
firearms trafficking ring, cases are often closed and referred for prosecution.
These agents stated that they believe this practice limited their ability to
pursue higher level cases and resulted in cases being opened and closed
quickly, with less regard to the significance or outcome of the cases.

      We asked the ATF Special Agent in Charge of that field division about
pursuing these higher level cases. He acknowledged that he preferred his
agents to initiate cases that could be completed within 1 month rather than
cases that involve surveillance, wiretaps, and other investigative methods
typical of complex conspiracy cases.


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       One Field Intelligence Group supervisor told us that Project
Gunrunner is not seeking information to conduct proactive investigations
and producing complex conspiracy cases for prosecution. According to this
supervisor, ATF should conduct its investigations “with the mindset of not
only ‘you [the suspects] are guilty of this,’ but ‘Where did you get that gun?’ ”
He went on to say, “If we know that specific individuals . . . are hiring straw
purchasers . . . we can target them, do surveillance on them, build a
conspiracy case, and go after them.”

       After we provided a draft of this report to ATF, ATF issued a strategy
document, entitled “Project Gunrunner – A Cartel Focused Strategy”
(September 2010 cartel strategy), to revise its approach to combating
firearms trafficking to Mexico and related violence. ATF distributed the
strategy document to ATF field personnel and International Affairs Office
staff on September 16, 2010. In this document ATF acknowledged the
limitations of ATF’s historical investigative focus on straw purchasers and
corrupt gun dealers and stated that ATF would “place greater emphasis on
multi-defendant conspiracy cases that focus on persons who organize,
direct, and finance cartel-related firearms and explosives trafficking
operations.”68

Recommendation

       We recommend that ATF:

       8.	     Focus on developing more complex conspiracy cases against
               higher level gun traffickers and gun trafficking conspirators.


Project Gunrunner has not made full use of the OCDETF Program’s
resources to conduct more complex conspiracy investigations.

      ATF’s Project Gunrunner investigations generally have not been
conducted in coordination with the Department’s multi-agency Organized
Crime Drug Enforcement Task Force (OCDETF) Program, which often
targets drug organizations. Although ATF has achieved some good results
when coordinating with OCDETF, we found that ATF’s focus on fast
investigations as well as management and staff misunderstandings about
how the OCDETF Program works have created barriers to greater
coordination.

       The OIG’s analysis of ATF case data illustrated ATF’s underutilization
of the OCDETF Program. Of the 374 Project Gunrunner cases that ATF


       68    ATF, “Project Gunrunner – A Cartel Focused Strategy” (September 2010), 4.


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closed in FY 2009, only 8 percent (30 cases) were designated as OCDETF.69
We also found that when ATF referred OCDETF cases to USAOs for
prosecution, the cases resulted in much longer sentences than
non-OCDETF cases. The 30 Project Gunrunner cases designated as
OCDETF resulted in an average sentence of 80 months. In comparison, the
average sentence for all Project Gunrunner cases from FY 2004 through
FY 2009 was 33 months. Similarly, the average number of defendants
differed sharply. While the average number of defendants for the 30
OCDETF cases was 6, the average number of defendants for all Project
Gunrunner cases was just 2.

ATF previously has directed staff to use the OCDETF Program, and the
Department now requires that the OCEDETF Program be used for cases
involving Mexican drug cartels.

       ATF policy has directed field staff to use the OCDETF Program since
at least July 2005, and in ATF’s June 2007 Gunrunner strategy, ATF
emphasized using OCDETF for appropriate firearms trafficking cases.70
According to the Gunrunner strategy, “OCDETF assets will be sought at the
earliest possible time once a qualifying nexus to a known [drug trafficking
organization] is documented.”71 Further, in April 2009, the Associate
Deputy Attorney General serving as the Director of the OCDETF Program
issued a memorandum stating that firearms trafficking cases are eligible for
the OCDETF Program. He stated:

       Investigations principally targeting firearms trafficking, rather
       than the underlying drug trafficking, are eligible for OCDETF
       designation if there is a sufficient nexus between the firearms
       and a major Mexican drug trafficking organization, provided the
       investigation otherwise meets OCDETF case standards.72

Despite this emphasis, in the 15-month period following the memorandum,
ATF reported that it has opened only 11 OCDETF cases related to the
firearms trafficking activities of Mexican drug cartels.

       69ATF was the lead agency in 21 percent (768 of 3,671) of all OCDETF cases in
which ATF participated from FY 2004 through FY 2009.

       70 ATF Order 3530.3, Organized Crime Drug Enforcement Task Force Program (July
2005), and ATF Southwest Border Initiative Project Gunrunner (June 2007).

       71   ATF, Southwest Border Initiative: Project Gunrunner (June 2007), 12.

       72 Stuart G. Nash, Associate Deputy Attorney General and Director of OCDETF,

memorandum to OCDETF Regional Agency and AUSA Coordinators, Lead Task Force
Attorneys, Executive Assistants, and Washington Agency Representatives Group,
Guidelines for Consideration of OCDETF Designation for Firearms Trafficking Cases
Related to Mexican Drug Cartels, April 27, 2009.


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       In January 2010, the Deputy Attorney General required ATF and
other Department components to use the OCDETF Program for all activities
targeting the Mexican cartels as part of the Department’s strategy for
combating the cartels (cartel strategy). The cartel strategy specifically
identified combating firearms trafficking as a key objective, named Project
Gunrunner as the primary ATF initiative in achieving that objective, and
stated that “increasingly close collaboration between ATF and the efforts of
the multi-agency drug task forces along the border, including, most
particularly, the OCDETF co-located Strike Forces, ensures that scarce ATF
resources are directed at the most important targets.”73

ATF’s use of the OCDETF Program is limited by ATF’s focus on fast
investigations, misunderstandings about the program, and low numbers of
ATF staff assigned to OCDETF task forces.

      We found that three factors have limited ATF’s use of the OCDETF
Program in the past – ATF’s focus on fast investigations, misunderstandings
about how the OCDETF Program operates, and ATF supervisors assigning
few or no staff to OCDETF task forces.

       The same ATF agents in the Southwest border field division who
reported that they felt discouraged from pursuing complex conspiracy cases
told us that field supervisors generally discouraged OCDETF cases because
the supervisors favored faster investigations. For example, an agent we
interviewed from a firearms trafficking enforcement group described “taking
a lot of heat” for having taken a case to the OCDETF Program. The agent
said that ATF field management had previously turned down a number of
cases that might have been proposed for OCDETF consideration. The agent
said that not using the OCDETF Program has resulted in agents not
pursuing the “higher people in the food chain” of the trafficking rings.

       The OIG asked an ATF official responsible for coordinating ATF’s
participation in the OCDETF Program why ATF field staff were reluctant to
use the program. The official expressed concern that staff across the
Southwest border, especially managers, incorrectly believed that a case
could be counted as a Project Gunrunner or an OCDETF case for the
purposes of ATF’s performance measures, but not both. As a result,
managers were reluctant to take cases to OCDETF. The official said the
reluctance was continuing despite the Deputy Attorney General’s 2010
cartel strategy and 2009 direction from the OCDETF Executive Council to
use OCDETF against drug cartels’ firearms trafficking.


      73 David W. Ogden, Deputy Attorney General, memorandum to heads of

Department components and all United States Attorneys, Strategy for Combating the
Mexican Cartels, January 7, 2010.


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       We also found that some ATF agents misunderstood the requirements
of the OCDETF Program in ways that may have contributed to the low
number of OCDETF-Gunrunner cases. In September 2010, ATF told the
OIG that, prior to the April 2009 OCDETF Director’s memorandum, ATF
firearms trafficking investigations with no significant drug trafficking nexus
were frequently refused by the OCDETF Program. However, our review
found that even after the April 2009 memorandum, some agents still
believed that OCDETF cases must be brought mainly against persons and
organizations on the Department’s priority drug target list.74 Other ATF
agents indicated that they did not believe that AUSAs would be interested in
OCDETF cases involving firearms trafficking, rather than drug trafficking.
For example, one field supervisor said he believed that to present an
OCDETF case, ATF agents “better have a DEA guy or an ICE guy sitting next
to them.” ATF agents said that ATF senior management needed to send a
clarification to all field staff instructing them to fully implement the Deputy
Attorney General’s cartel strategy.

      We also noted that in some locations, ATF supervisors have assigned
few or no staff to OCDETF task forces operating in their areas. For example,
in McAllen, Texas – a center of firearms trafficking activity where ATF has
two enforcement groups, including one dedicated to Project Gunrunner –
ATF has only two agents in the OCDETF satellite office. In San Diego,
where ATF has three enforcement teams, one of which is dedicated to
Project Gunrunner, only one agent is assigned to the OCDETF task force.
In Laredo, Texas, ATF has no agents assigned to the OCDETF task force.

       In contrast, ATF’s Phoenix Field Division has an enforcement group
(up to 10 agents) assigned to and co-located with the Phoenix OCDETF task
force. Through one ongoing case from that task force, the ATF agents
indicted four people and identified a suspect in Mexico as the head of the
trafficking ring. The supervisor of that enforcement group said, “If it is a
bigger case that’s going to [succeed] on the border, there is a good chance
you are going to spend some money,” and that OCDETF was an important
way to obtain the resources needed for complex conspiracy investigations.
Other ATF staff we interviewed told us that through OCDETF task forces
they can obtain intelligence from other agencies, particularly the DEA, on
drug cartels’ firearms trafficking activity, helping ATF to investigate firearms
trafficking rings, not just straw purchasers.

    We asked ATF officials why they had not assigned more staff to
OCDETF task forces. ATF responded that it makes decisions based on

       74  The Department maintains a unified list of international “command and control”
drug traffickers and money launderers called the Consolidated Priority Organization Target
list.



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where it sees “cases of firearms trafficking or violations of other federal
firearm laws more pronounced and where they can maximize results of
affecting violent crime. 75”

       According to an ATF official responsible for ATF’s participation in the
OCDETF Program, in the past, ATF has consistently requested more funding
from the OCDETF Program to cover additional agents that ATF assigns to
OCDETF cases. However, the official said that the requests have been
rejected by the Department’s Justice Management Division or the White
House Office of Management and Budget.

        In its September 2010 cartel strategy document, ATF emphasized the
advantages of using OCDETF as a part of its efforts to impede firearms
trafficking to Mexico. The memorandum that accompanied the strategy
document stated, “At the heart of our increased emphasis on cartel focused
investigations is greater use of the [OCDETF] program” and the strategy
itself directed all field offices to “consider assigning a complement of special
agents” to the OCDETF task forces.76

Recommendation

       We recommend that ATF:

       9.	   Send guidance to field management, agents, and intelligence staff
             encouraging them to participate in and exploit the resources and
             tools of the OCDETF Program, as directed in the Deputy Attorney
             General’s Cartel Strategy.

Statutes used to combat firearms trafficking do not have strong
penalties.

       There is no federal statute specifically prohibiting firearms trafficking
or straw purchases. Consequently, ATF agents and federal prosecutors use
other criminal statutes to charge individuals involved in firearms trafficking
crimes. These statutes carry relatively low sentences, particularly for straw
purchasers of guns. The Sentencing Guidelines also provide short
sentences for firearms trafficking-related crimes. As a result, individuals

        75 As of September 2010, ATF reported that, in addition to the task force in

Phoenix, it had an enforcement group (12 personnel) assigned to the Houston OCDETF task
force and 1 agent each assigned to OCDETF task forces in El Paso, Texas, and Tucson,
Arizona.

       76 Mark R. Chait, Assistant Director for Field Operations, memorandum to all

Assistant Directors and Field Operations Personnel, Project Gunrunner – A Cartel Focused
Strategy, September 8, 2010, and ATF, “Project Gunrunner – A Cartel Focused Strategy”
(September 2010), 10.


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convicted under these statutes generally receive lower penalties than
persons convicted of other types of trafficking.

In the absence of a specific federal statute, ATF uses a wide variety of
statutes to address criminal firearms trafficking activities.

       According to ATF guidelines for implementing the Gun Control Act, the
statutes that are most useful in investigating illegal firearms trafficking
activities include 18 U.S.C. §§ 922 and 924.77 These statutes include
subsections that address falsifying information when purchasing a gun.
Neither statute specifically prohibits firearms trafficking or straw
purchasing.78

      We analyzed ATF data on all Project Gunrunner cases referred to
USAOs for prosecution between FY 2004 and FY 2009 and identified the
most frequently used statutes and the average sentences given in cases that
were prosecuted federally.79 ATF used 75 different statutes to obtain federal
prosecutions of Project Gunrunner cases during that period.80 We
determined through our interviews of ATF personnel and analysis of ATF
cases referred to USAOs for prosecution that four of the statutes are most
often used to build cases against firearms traffickers:

       1. Knowingly making a false statement – 18 U.S.C. § 924(a)(1)(A) –
          ATF commonly uses this charge for straw purchasers who
          knowingly made false statements to gun dealers or in the records
          that gun dealers are required to maintain (Form 4473);

       2. Knowingly making a false statement in connection with a firearm
          purchase – 18 U.S.C. § 922(a)(6) – ATF commonly uses this charge
          when individuals make false statements that affect the legality of
          sales;81


       77   ATF Order 3310.4B, Firearms Enforcement Program (February 1989), 109.

       78 In fact, the term “trafficking” appears in the Gun Control Act only in §§ 924(c)(1),
924(g), and 929, and in those places it refers to the use of a gun during drug trafficking.

       79 We noted that ATF used 25 different statutes to refer Project Gunrunner cases to
state prosecutors.

       80 Table 1 (in the Background section of this report) provides the top 10 statutes

used for prosecution of Project Gunrunner cases during that period.

       81 The difference between 18 U.S.C. § 922(a)(6) and 18 U.S.C. § 924(a)(1)(A) pertains

to whether the false statement in question affected the legality of the gun sale. Defendants
can be charged with 18 U.S.C. § 922(a)(6) if, for example, they lied about their ages because
they were under 18 or lied about their state residency because they were from another
                                                                                         Cont.
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       3. Knowing possession of a firearm by a convicted felon –
          18 U.S.C. § 922(g)(1) – ATF uses this charge for convicted criminals
          who qualify as “prohibited persons” under the Gun Control Act and
          can be prosecuted for being in possession of a firearm; and

       4. Willfully engaging in firearms business without a license –
          18 U.S.C. § 922(a)(1)(A) – ATF commonly uses this charge when
          individuals deal in guns as a regular course of trade or business.
          Those who make occasional gun sales cannot be charged under
          this statute.

Statutes used to prosecute firearms traffickers carry relatively low
sentences, particularly for straw purchasers of guns.

       According to our analysis of ATF data, the penalties imposed for
violations of the four statutes that ATF most frequently used to combat
firearms trafficking with Project Gunrunner cases are lower than penalties
for violations of statutes on other types of Project Gunrunner cases. The
difference is especially acute when compared to penalties imposed for
violations with a drug nexus. However, criminal defendants are often
charged with criminal statutes that include firearms trafficking offenses and
other crimes which carry longer sentences. For drug conspiracy violations,
the penalties imposed average almost 10 years. In comparison, although
straw purchasing is one of the most frequent methods used to divert guns
out of lawful commerce according to ATF, we found defendants convicted of
offenses related to only this criminal activity are generally sentenced to less
than 1 year in prison. Figure 5 compares sentences of defendants convicted
only under each of the statutes used in Project Gunrunner firearms
trafficking cases with sentences for violations of drug-related statutes.




state. A defendant’s false statement in a § 922(a)(6) prosecution must concern a fact
material to the lawfulness of the firearms transaction. Conversely, prosecutions for 18
U.S.C. § 924(a)(1)(A) do not need to prove the defendant intended to affect the legality of the
sale. Rather, this statute requires: “(1) the defendant knowingly made a false statement;
and (2) the statement pertained to information that the law requires [a gun dealer] to keep.”


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Office of the Inspector General
Evaluation and Inspections Division
           Figure 5: Average Prison Sentences in Months for 

     Project Gunrunner Cases by Statute, FY 2004 through FY 2009 


                     Knowingly makes a false
                   statement in connection with        12
                        firearm purchase

                      Knowingly makes a false
                                                       14
                            statement


                  Willfully engaging in firearms
                                                        18
                   business without a license


               Knowing possession of a firearm
                                                             48
                    by a convicted felon

                  Manufacturer, distribution, or
                   possession of a controlled                             91
                          substance


                               Drug conspiracy                                 117


                                                   0   20 40 60 80 100 120 140
                                                             Axis Title

        Source: OIG analysis of N-Force data.

      Figure 6 shows the average prison sentences for defendants charged
with sole violations of the four statutes that ATF most used on Project
Gunrunner firearms trafficking cases between FY 2004 and FY 2009
compared with the maximum penalties.




U.S. Department of Justice                                                           61
Office of the Inspector General
Evaluation and Inspections Division
    Figure 6: Average Prison Sentences for Project Gunrunner Cases
     and Maximum Allowable Sentences, FY 2004 through FY 2009

                                                                       120                120
               120

               100

                80
      Months




                               60                   60
                60
                                                                48

                40
                                            18                                      12
                        14
                20

                 0
                     Knowingly makes     Willfully engaging       Knowing       Knowingly makes
                     a false statement       in firearms      possession of a    a false statement
                                         business without      firearm by a     in connection with
                                              a license       convicted felon        a firearms
                                                                                     purchase



                                 Average Prison Sentence        Statutory Maximum


Source: OIG analysis of N-Force data.

Sentencing Guidelines provide short sentences for firearms trafficking
violations.

       We examined the Sentencing Guidelines for the statutes that ATF
most frequently used in charging defendants with firearms trafficking.82
Under the Guidelines, straw purchasing-related offenses are categorized as
lesser crimes, punishable by 10 to 16 months in prison. This is because
these crimes are assigned low “offense levels” and because to legally
purchase a gun, by definition, a gun purchaser must have had no prior
felony convictions. The OIG’s analysis of ATF’s case data found that
40 percent of all defendants who were charged and convicted of “knowingly

        82 The guidelines, established by the U.S. Sentencing Commission, “provide federal

judges with fair and consistent sentencing ranges to consult at sentencing” and, among
other things, are “designed to incorporate the purposes of sentencing (i.e., just punishment,
deterrence, incapacitation, and rehabilitation).” U.S. Sentencing Commission, “An
Overview of the United States Sentencing Commission” (June 2009), www.ussc.gov/general
/USSC_Overview_200906.pdf (accessed July 2010). In United States v. Booker 375 F.3d
508 (04-104) 543 (2005), the U.S. Supreme Court ruled that binding sentencing guidelines
are unconstitutional and that the guidelines were no longer binding.


U.S. Department of Justice                                                                      62
Office of the Inspector General
Evaluation and Inspections Division
making a false statement in connection with firearm purchase” (18 U.S.C. §
922(a)(6)) – one of the primary charges associated with straw purchasing –
received only probation.

USAOs often decline Project Gunrunner cases that are based on the
most commonly used statutes.

       USAOs are less likely to accept and to prosecute ATF’s Project
Gunrunner cases for several reasons, including the lower penalties
described above. We found that AUSAs often decline Project Gunrunner
cases because they believe it is difficult to obtain convictions on the
violations established in the four statutes that ATF typically uses for
firearms trafficking and because they believe it is difficult to obtain evidence
from Mexico. We also found that USAOs decline to prosecute ATF Project
Gunrunner cases that are based on the four statutes at a much higher rate
than Project Gunrunner cases citing violations of other statutes.

      We examined the reasons for the declinations of Project Gunrunner
cases recorded in the Executive Office for United States Attorneys’ case
management system, Legal Information Office Network System (LIONS).83
Of the 125 cases recorded as declined in N-Force, there were 45 cases for
which declination reasons were recorded in LIONS.84 For those 45 cases,
USAOs gave 12 different reasons for declination in LIONS. The most
common reasons USAOs declined these cases were a “lack of evidence of
criminal intent” or “weak or insufficient admissible evidence,” accounting for
a combined 38 percent (17 of 45 cases). Other reasons USAOs cited for
declining Project Gunrunner cases were resource-related, such as “lack of
investigative resources” or “lack of prosecutorial resources,” a combined
11 percent (5 of 45). In addition, ATF agents told us that they do not refer
cases to the USAOs that they assume would be rejected.




       83   In response to an OIG recommendation made in our review on the Department’s
efforts to prevent staff sexual abuse of inmates (Evaluation and Inspections Report I-2009­
004), in a November 24, 2009, memorandum to all USAOs, the EOUSA Director required
that all declinations of cases be entered into LIONS, whether an investigative agency
presents the referral in writing and the USAO immediately declines it (“immediate
declination”), or a matter is opened in LIONS and the USAO later decides to close the
matter without filing charges (“later declination”). However, EOUSA officials noted that
many declinations occur informally, such as over the telephone, in which case the reasons
for the declination have not been recorded in LIONS in the past. In June 2010, EOUSA
reported to the OIG that it was still considering revising its policy to require the recording of
all declinations.

       84As a part of this review, we did not examine the reasons for the decisions by
USAOs to decline Project Gunrunner cases referred to them for prosecution by ATF.


U.S. Department of Justice                                                               63
Office of the Inspector General
Evaluation and Inspections Division
AUSAs believe ATF’s Project Gunrunner cases are difficult to prosecute.

       In discussions with the OIG, Department and USAO attorneys
explained that proving the elements necessary to obtain convictions under
the statutes used to combat firearms trafficking is difficult. For example, a
Deputy Assistant Attorney General who was a former AUSA told the OIG
that willfully engaging in a firearms business without a license is a very
difficult charge to prove because the government has to prove that an
individual was acting in a business capacity. To do that, ATF must
establish that the sale was not a private transaction but was part of a
revenue earning enterprise. In practice, this means ATF must get the
suspect to admit or acknowledge selling guns “willfully,” as specified in the
statute.85 According to the Deputy Assistant Attorney General, many
suspects can avoid prosecution simply by claiming they were selling guns
from their private collection, which is not a crime.

       We also found that some of the reluctance of prosecutors to accept
ATF’s Project Gunrunner cases appeared to be because of concerns over
difficulties in obtaining evidence from Mexico. For example, building a case
against a firearms trafficker may require the prosecutor to obtain evidence
from Mexico to prove that the gun seized in Mexico is the same one
purchased by an individual in the United States. Several AUSAs we
interviewed told us that because they believed that the process for obtaining
this evidence is cumbersome and time consuming, they had never
attempted to obtain evidence from Mexico. In contrast, ATF personnel in
Mexico City who are familiar with evidentiary matters told us that the
process of obtaining this evidence was straightforward and undemanding,
although underused.

      Similarly, some prosecutors were unsure how to establish that a case
has a nexus to gun trafficking to Mexico and were unaware that a gun trace
can prove a gun acquired by a straw purchaser ended up in Mexico. This
lack of understanding is important because five out of six AUSAs we spoke
with told us that proving that a case has a nexus to Mexico is key to their
decision to accept the case.




        85 18 U.S.C. § 922(a)(1) states, “It shall be unlawful for any person except a licensed

importer, licensed manufacturer, or licensed dealer, to engage in the business of importing,
manufacturing, or dealing in firearms, or in the course of such business to ship, transport,
or receive any firearm in interstate or foreign commerce; or except a licensed importer or
licensed manufacturer, to engage in the business of importing or manufacturing
ammunition, or in the course of such business, to ship, transport, or receive any
ammunition in interstate or foreign commerce.”


U.S. Department of Justice                                                              64
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AUSAs decline more ATF Project Gunrunner cases involving firearms
trafficking than Project Gunrunner cases not involving firearms trafficking.

       We examined ATF data regarding referrals of 607 cases from FY 2004
through FY 2009 that cited at least one of the four statutes most used by
ATF to charge firearms traffickers. According to ATF’s case management
system, 29 percent of the referrals to USAOs were pending a decision as of
April 2010. Of the referrals that had been responded to by USAOs, the
referrals based on the statute knowingly making a false statement in
connection with a gun purchase were declined by USAOs 32 percent of the
time, and those based on the statute knowingly making a false statement
were declined 21 percent of the time. Referrals based on the statute
willfully engaging in a firearms business without a license were declined
24 percent of the time and those based on knowing possession of a firearm
by a convicted felon were declined less frequently – 12 percent of the time.

       In contrast, AUSAs declined Project Gunrunner referrals that were not
directly related to firearms much less frequently during FY 2004 through
FY 2009. For example, when ATF pursued the statute “manufacturer,
distribution, or possession of a controlled substance” (21 U.S.C. § 841(a)(1))
in a Project Gunrunner case, it was declined only 7 percent of the time and
“drug conspiracy” (21 U.S.C. § 846) was declined 9 percent of the time.
Significantly, the statute “use of a communication device in furtherance of
drug trafficking” (21 U.S.C. § 843(b)) was never declined by federal
prosecutors. We also found that USAOs responded more promptly to ATF
Project Gunrunner referrals not directly related to firearms. ATF’s case
management system reflected that only 5 percent of the referrals that were
not directly related to firearms trafficking were awaiting a response from a
USAO, compared to 29 percent of firearms-related referrals.

AUSAs stated they were less likely to prosecute ATF’s firearms trafficking-
related Project Gunrunner cases.

       Overall, our interviews with AUSAs in Southwest border districts
indicated that the factors cited above make USAOs less likely to dedicate
their resources to ATF’s firearms trafficking-related Project Gunrunner
cases than to other types of cases. Our interviews with AUSAs found that
the lack of long sentences is also a key factor in their decisions about
whether to accept these Project Gunrunner cases. As one AUSA stated, “If
there were more penalties for firearms trafficking cases, you would see a lot
more interest [from USAOs] in pursuing [those cases].” AUSAs told us that
the limited prosecutions and low penalties reduce their ability to use the
threat of prosecution to induce suspects to cooperate and provide evidence
against their co-conspirators.



U.S. Department of Justice                                              65
Office of the Inspector General
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       To improve the USAOs’ support for and understanding of firearms
trafficking-related Project Gunrunner cases, in June 2009 ATF’s Assistant
Director for Field Operations directed all ATF field divisions to meet with
their respective U.S. Attorneys to convey the importance of firearms
trafficking.86 However, three AUSAs and some ATF agents told the OIG that
much more communication is needed.

Some ATF agents are reluctant to refer cases because they believe the cases
will not be accepted for prosecution.

       In addition to the high USAO declination rate for Project Gunrunner
cases focused on firearms traffickers, ATF agents told us that they do not
refer many cases to the USAOs that they assume would be rejected because
of criteria set by individual USAOs. For example, ATF agents told us that
the USAO in one Southwest Border district will not seek to indict a suspect
for willfully engaging in a firearms business without a license unless the
suspect was given an official “cease and desist” letter and then was caught
committing the same crime again. This burden of proof, according to ATF
agents, means that many agents do not bother to present such cases to
USAOs for prosecution.

       Similarly, straw purchasing cases, in which a suspect obtains one or
more guns on behalf of a prohibited person, were also identified by ATF as
likely to be declined by USAOs. In fact, one AUSA stated that he declines
straw purchasing cases because they lack “jury appeal” and result in light
sentences. The Deputy Assistant Attorney General also stated that because
straw purchasers’ crime is essentially lying on a federal form, many judges
and defense attorneys treat the crime as “paperwork violations.”
Consequently, agents told us, they may not even refer straw purchasing
cases for prosecutorial consideration. Like AUSAs, ATF agents in Southwest
border field divisions also told us that the lesser penalties and infrequent
prosecution of trafficking offenses reduce their ability to use prosecution as
a lever to obtain cooperation from defendants when they are arrested, which
is important in investigating firearms trafficking rings.




         86   ATF National Firearms Trafficking Enforcement Implementation Plan (June 25,
2009).


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Office of the Inspector General
Evaluation and Inspections Division
             PART IV: MULTI-AGENCY COORDINATION ISSUES 



       ATF coordinates well with the DEA and CBP on firearms
       trafficking cases, but ATF and ICE do not consistently work
       together effectively on investigations of firearms trafficking
       to Mexico despite the memorandum of understanding these
       two agencies signed in 2009.


ATF coordinates well with the DEA and CBP, but ATF and ICE are not
working together effectively on investigations.

      ATF cites its coordination with other U.S. agencies – in particular, the
DEA, CBP, and ICE – as an integral aspect of ATF’s efforts to stem the flow
of guns to Mexico under Project Gunrunner.87

ATF works well with the DEA and CBP in operations and investigations.

       The DEA’s counternarcotics mission parallels ATF’s Project
Gunrunner, as the two organizations are targeting the same organizations
and often the same individuals. We found that the DEA and ATF support
each other’s investigations, and the DEA lends resources to ATF through
multi-agency OCDETF task forces and other field operations. The CBP, in
its role in securing the border into Mexico, also complements Project
Gunrunner.

      Regarding the DEA, OCDETF task forces provide an opportunity for
ATF and the DEA to share information in building cases to the benefit of
both agencies. In addition, in Mexico itself, where the DEA has
approximately 100 staff in 11 different cities, the DEA assists ATF with
gathering information on seized guns. The DEA Attaché to Mexico is
currently allowing ATF to assign an agent to the DEA’s Sensitive
Investigations Unit, composed of U.S.-vetted and trained Mexican law
enforcement personnel, and ATF uses the unit in gun-related investigations.
ATF plans to assign one supervisor permanently to this unit.

       Similarly, ATF reported that when it “develops credible information
that firearms, explosives, and ammunition are approaching a border
crossing, ATF provides information to CBP to support southbound


        87 Although ATF also seeks to coordinate, as necessary, with other federal agencies,

including the FBI, the Secret Service, and the Internal Revenue Service, we limited our
review to the agencies with which ATF has the most frequent contact under Project
Gunrunner – the DEA, CBP, and ICE.


U.S. Department of Justice                                                           67
Office of the Inspector General
Evaluation and Inspections Division
interdiction stops.” Our interviews with ATF officials and documents they
supplied provided numerous examples of this.

ATF and ICE are not collaborating effectively on investigations of firearms
trafficking to Mexico.

       ATF and ICE have overlapping authorities and responsibilities for
investigating firearms trafficking to Mexico. ATF’s Project Gunrunner and
ICE’s Operation Armas Cruzadas separately focus on firearms trafficking
from the United States to Mexico. Project Gunrunner implements a range of
ATF enforcement and                               Memorandum of Understanding
regulatory activities, as                        Between ATF and ICE, June 2009
discussed in this report, while       Recognizes the relevant jurisdiction of each agency
Operation Armas Cruzadas                and the legal authority granting each its respective
targets firearms trafficking as a       jurisdiction.
smuggling violation. ATF             	 Instructs ATF and ICE to share intelligence that
cannot effectively combat               relates to the jurisdiction of the other agency “in a
                                        timely manner.”
firearms trafficking to Mexico
without border and smuggling          Acknowledges that gun dealer inspections are within
                                        the “sole purview” of ATF and investigations
enforcement by ICE, and ICE             concerning ports of entry and borders must be
cannot always investigate               coordinated through ICE.
smugglers without                     States that the resolution of any interagency conflicts
investigating the source of             will begin at the lowest level possible.
these guns (gun dealers and           Instructs ATF and ICE that when it becomes apparent
gun shows). Despite this, we            that an investigation leads into an area of concurrent
found that ATF and ICE have             jurisdiction, the agencies must “coordinate all
                                        pertinent and necessary information concerning that
not worked well together in             investigation and do so at the local level.”
their respective firearms
trafficking investigations. A memorandum of understanding (MOU) between
ATF and ICE, which was updated in June 2009 to address firearms
trafficking investigations and related activities, has not significantly
improved coordination between the two agencies.88

      The MOU between ATF and ICE states, “The Agencies recognize the
inherent and shared responsibility to operate collaboratively in order to
ensure the mutual success of the activities of both agencies . . . .” The
agreement further directs the two agencies to “coordinate all pertinent and
necessary information concerning firearms/explosives investigations
implicating both ATF’s and ICE’s authorities.”



       88 The MOU between ICE and ATF was signed by the Acting Director of ATF and the

Assistant Secretary of ICE on June 30, 2009, updated from a previous version. The
agreement was made in response to the GAO’s report, Firearms Trafficking: U.S. Efforts to
Combat Arms Trafficking to Mexico Face Planning and Coordination Challenges, GAO-09-709
(June 2009).


U.S. Department of Justice                                                             68
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      We found that some field staff do not know what the MOU requires of
them, while other agents were reluctant to implement its provisions. Many
ATF and ICE field personnel we interviewed misinterpreted the intent of the
MOU as being to keep everyone “in their own lanes,” meaning to keep ICE
from conducting investigations at the source of firearms trafficking and ATF
from investigations that involve smuggling, rather than “to strengthen the
partnership between the agencies,” as the MOU states.

       One supervisor stated that he viewed the purpose of the MOU as
being to keep the other agency from “screwing things up.” Another
supervisor, referring to one specific field office as “a loose cannon,” told the
OIG that if everyone would “stay in their lane, we would all work together
better.” Yet another supervisor told the OIG that he had no problems with
the other agency precisely because those agents stay in their lanes. A
different supervisor said the MOU had not changed anything, particularly in
jurisdictional overlap, despite what he described as the two agencies’
“mutual dependency.” Another conceded to the OIG that he was unfamiliar
with the contents of the MOU.

       ATF and ICE field personnel described to us incidents in which one
provision of the MOU, which stated that all ICE operations at gun dealers
must be coordinated with ATF, was not adhered to. For example, one ATF
field supervisor told us that ICE tried to assign an undercover agent to a
gun dealer without coordinating with ATF. According to the ATF supervisor,
the ICE agent involved said he had never read the MOU and did not realize
the MOU required notification to ATF.

      Another area of concern expressed by ATF personnel is ICE’s criminal
enforcement activities at gun shows. ICE agents reported to us that ICE’s
gun show operations, which began in early 2009, are a key component of
ICE’s Operation Armas Cruzadas. As a part of this Operation, ICE agents
may act on information from an informant or other intelligence source,
which may involve investigating suspicious straw purchase activity at gun
shows. ATF officials cited several concerns about whether ICE had
adequate justification for some of the enforcement activities it conducted at
gun shows; that ICE’s interaction with sellers at gun shows may be
erroneously viewed by gun dealers as an ATF Industry Operations
compliance inspection, which by law can occur only once a year for each
gun dealer; and, that ATF’s relationships with gun dealers, a primary source
of ATF investigative leads, may be harmed by ICE’s actions at gun shows.

       ATF supervisors also expressed concern about ICE’s use of eTrace.
The MOU states that ICE must inform ATF when ICE initiates an
investigation as the result of a gun trace. This provision of the MOU seeks
to deconflict agency activities. However, ICE and ATF personnel we
interviewed told us that these notifications are not always made. For

U.S. Department of Justice                                                69
Office of the Inspector General
Evaluation and Inspections Division
example, one ICE field office supervisor stated his agents do not necessarily
inform ATF when they initiate an investigation based on trace results. Our
analysis of gun trace data shows that in calendar year 2009, ICE submitted
84 Mexican crime guns traced to gun dealers in that Southwest border ICE
supervisor’s jurisdictional area, 19 of which had a time-to-crime of less than
a year. However, according to ATF field supervisors in Mexico, ICE had
notified ATF of only one or two investigations it initiated based on these
traces.

       We also found some instances of ATF personnel not fully complying
with provisions of the MOU. In one field office, ATF routinely failed to notify
ICE of ongoing investigations with a direct link to the border. Additionally,
an ICE field supervisor sought to assign an ICE agent to two different ATF
firearms trafficking groups to foster coordination and encourage the sharing
of resources and information. However, ICE personnel told us that the offer
was rejected by the supervisors of both ATF firearms trafficking groups.
According to the ICE supervisor, one of these ATF supervisors stated, “What
can ICE do for me?” That ATF supervisor later said the same thing to the
OIG.

       Another ATF supervisor told us that neither agency involves the other
in an investigation until the case is “firm,” rather than involving the other
agency early on. A senior ATF intelligence official told us, “We are in a
constant struggle with ICE about stepping into each other’s jurisdiction and
sharing information.”

Agents are not routinely sharing information and intelligence.

       The number of joint firearms trafficking investigations involving ATF and
ICE has increased since Project Gunrunner began. According to data from
ATF’s N-Force system, the number of joint investigations related to Project
Gunrunner increased from 17 in FY 2005 to 53 in FY 2008, although the
number dropped to 35 in FY 2009.89 Despite the increase in joint
investigations, we found that coordination problems remain. The MOU
mandates that each agency is to notify the other “in a timely manner” of
intelligence relating to the other’s jurisdiction. That is, ICE must provide to
ATF intelligence relating to a gun dealer and ATF must provide to ICE
intelligence on illegal exports, including guns, crossing the U.S. border.

        89 On October 1, 2010, in response to a draft of this report, ICE provided the OIG

with a list of 113 instances in which ICE and ATF jointly investigated between June 2009
and September 24, 2010. According to ICE, only 37 (33 percent) of these joint investigative
efforts specifically addressed firearms trafficking to Mexico. Moreover, we do not believe
that a list of examples of cases which ICE and ATF jointly investigated undermines the
underlying findings in this section of the report. As we note, ATF initiated over 1,800
Project Gunrunner cases between FY 2007 and FY 2009, only 105 (6 percent) of which are
shown to be joint investigations in ATF’s case management system.


U.S. Department of Justice                                                          70
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Evaluation and Inspections Division
According to our interviews, this is often not occurring. For example, one ICE
agent working on Operation Armas Cruzadas told the OIG that his team never
receives notification about cases involving firearms trafficking to Mexico,
despite several large ATF investigations in that field office. An ICE supervisor
we interviewed characterized this type of notification as occurring “to a pretty
limited degree,” creating “a missed opportunity for [ATF].”

       We also found that many of the problems between ATF and ICE
personnel arise out of a lack of knowledge of the other agency’s jurisdiction
and operations. ATF has a well-developed specialty in firearms and
explosives investigations. ATF’s eTrace system and multiple sales of
handgun information can provide investigative leads and intelligence of use
to both agencies. ICE has a specialty in cross-border and smuggling crimes.
Although ATF has always conducted firearms trafficking cases that include
international trafficking, ICE agents have extensive experience in these
types of cases. Some ICE agents stated that they feel they are not being
used as experts on export violations and that ATF does not fully understand
these types of investigations. One ICE Special Agent in Charge told us, “ATF
needs to recognize that [when] anything crosses that border in either
direction, we [ICE] have jurisdiction.” Another ICE agent referred to a
specific case in which ATF hoped to charge a suspect with smuggling
violations in an upcoming trial, but ICE had to decline the case referral from
ATF because the process of establishing smuggling violations takes much
longer than the time ATF allotted. He opined that, had ICE been involved
earlier, the smuggling case could have been developed and prosecuted.

ATF has rarely used ICE’s smuggling charges against gun traffickers, which
can yield longer sentences than firearm charges.

      We found that despite the longer sentence prosecutors could obtain
from convicting a defendant of smuggling charges, ATF has not frequently
used 18 U.S.C. § 554, which makes smuggling contraband from the
United States a federal offense. Although ICE has primary jurisdiction to
enforce 18 U.S.C. § 554, coordination with ICE could allow ATF’s Project
Gunrunner defendants to be charged under this statute and could result in
lengthier sentences than under the four charges most commonly used by
ATF in firearms trafficking cases.

      However, we found that from FY 2004 through FY 2009, only seven
defendants in Project Gunrunner cases were convicted of smuggling.90 As
Figure 7 illustrates, our analysis found that the average sentence for

        90 Of the seven defendants in ATF cases convicted of smuggling charges, we were

able to verify that six of the seven were trafficking guns to Mexico or Guatemala. In
addition to “smuggling goods from the United States,” these defendants were convicted of
additional violations such as “willfully engaging in firearms business without a license,”
which added to their sentences.


U.S. Department of Justice                                                            71
Office of the Inspector General
Evaluation and Inspections Division
smuggling violations was 5 years (60 months), several times longer than the
average sentences for the types of convictions frequently made from ATF
investigations.

    Figure 7: Average Prison Sentences for Project Gunrunner Cases
           70
                    60
           60
                                 48
           50

           40

           30
                                              18
           20                                              14           12
           10

            0
                Smuggling     Knowing      Willfully  Knowingly     Knowingly
                goods from possession of engaging in makes a false makes a false
                the United a firearm by a firearms    statement statement in
                  States     convicted    business                  connection
                                 felon    without a                 with firearm
                                           license                   purchase


        Source: OIG analysis of N-Force data.

Recommendation

       We recommend that ATF:

       10. Provide guidance to ATF field supervisors and agents to better
           coordinate with ICE, including direction on how to “coordinate all
           pertinent and necessary information” in areas of “concurrent
           jurisdiction,” as defined in the memorandum of understanding.




U.S. Department of Justice                                                         72
Office of the Inspector General
Evaluation and Inspections Division
                    PART V: MEXICAN CRIME GUN TRACING 



       ATF’s attempts to expand gun tracing in Mexico have been
       unsuccessful. Although the number of trace requests from
       Mexico has increased since FY 2006, most seized guns in
       Mexico are not traced. Moreover, most trace requests from
       Mexico do not succeed in identifying the gun dealer who
       originally sold the gun, and the rate of successful traces has
       declined since the start of Project Gunrunner.           Most
       Mexican crime gun trace requests that were successful were
       untimely and of limited use for generating investigative
       leads.   Senior Mexican law enforcement authorities we
       interviewed do not view gun tracing as an important
       investigative tool because of limitations in the information
       tracing typically provides and because ATF has not
       adequately communicated the value of gun tracing to
       Mexican officials.


Despite ATF’s efforts to increase the tracing of guns seized in Mexico,
traces are not producing usable investigative leads.

      Gun tracing can help ATF identify firearm traffickers operating in the
United States and in Mexico. Gun tracing can also provide intelligence
regarding patterns and trends in gun trafficking.

       In its June 2007 Project Gunrunner strategy, ATF established the
implementation of eTrace in Mexico and improvements in its intelligence
capabilities as two of the four key operational elements of Project
Gunrunner. Further, the Project Gunrunner strategy states, “In order for
intelligence relating to [Project Gunrunner] to be of value, it must be ‘real
time’ in nature.”

      Yet, we found that most crime guns seized in Mexico are not traced
and trace requests often cannot be completed because of missing or
improperly entered gun data. Further, Mexican trace requests often are not
submitted on a timely basis. As a result, most Mexican crime guns that can
be traced were initially sold too long ago to yield useful investigative leads.91

        91 ATF stated that its common definition of a “successful trace” is a trace that

provides any additional historical or identifying information concerning the firearm beyond
the original information submitted in the trace request. However, some ATF staff provided
different definitions of a successful trace, such as one that identifies the first purchaser.
We define a successful trace as one that identifies the gun dealer who originally sold the
weapon because that is the minimum result that can provide ATF with usable intelligence
                                                                                           Cont.
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Therefore, few investigative leads and intelligence were developed from
Mexican crime gun traces.

ATF’s attempts to expand tracing in Mexico have been unsuccessful.

      ATF considers Mexican law enforcement’s participation in tracing
crime guns – by obtaining seized guns and entering the required information
into eTrace – vital to the success of Project Gunrunner. Because ATF and
other U.S. law enforcement agencies have no authority to conduct their own
investigations in Mexico, ATF relies on Mexican officials to collect accurate
crime gun information.

      Under Project Gunrunner, ATF had intended to deploy a new Spanish
language eTrace to all 31 state crime laboratories in Mexico to expand gun
tracing. ATF reported that after its Spanish eTrace pilot program in
December 2009, ATF deployed Spanish eTrace to all Spanish-language
users in March 2010. However, as of June 2010, ATF Mexican federal
authorities still had not agreed to deploy Spanish eTrace to the state
laboratories. We asked officials from the Mexico Attorney General’s office
and the Secretariat of Public Security why they were unwilling to provide
Mexican state police laboratories with access to Spanish eTrace. They
stated that illegal possession of guns is a federal offense in Mexico and not
within the jurisdiction of the Mexican states. They said all gun-related
investigative and intelligence activity, including tracing, should be
centralized at the national level. The officials told us that they fear
decentralizing gun tracing would lead to duplication of effort between federal
and state governments, an increased rate of errors by state officials who are
untrained and inexperienced, and operational confusion.

       ATF has continued its efforts to promote eTrace use among Mexican
officials, with the ultimate goal of Mexican officials independently
conducting comprehensive gun tracing. Following a September 2010 eTrace
memorandum of understanding between ATF and the government of Mexico,
ATF told us it plans to provide Spanish eTrace and firearms identification
training to approximately 300 Mexican Attorney General staff located in
Mexico City and all 31 states beginning in November 2010. ATF plans to
provide eTrace user accounts to the PGR staff who received the training.




information. Trace requests that cannot be completed because of missing or improperly
entered gun data are considered “unsuccessful traces.”


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The number of trace requests from Mexico has increased since FY 2006, but
most seized guns are not traced.

      Mexican crime gun trace requests to ATF have increased since Project
Gunrunner was established. The number of traces of Mexican crime guns
increased from 5,834 in FY 2004 to almost 22,000 in FY 2009.

       Yet, in a June 2009 report, the GAO estimated that less than a
quarter of crime guns transferred to the Mexican Attorney General’s office in
2008 were submitted to ATF for tracing.92 ATF Mexico Country Office staff
said that CENAPI traces only weapons from high-profile seizures. Although
ATF provided CENAPI with 10 laptops and trained CENAPI staff on how to
submit traces through eTrace, ATF Mexico Country Office staff reported that
Mexican officials are not entering many trace requests. Specifically, ATF
reported that from FY 2007 through FY 2009, only about 6 percent of
Mexican crime gun traces were entered into eTrace by CENAPI personnel.
The remaining 94 percent of traces were entered by ATF personnel on behalf
of CENAPI. Consequently, ATF Mexico Country Office personnel told us
that, whenever they can, they respond to the scene of the seizures and
initiate trace requests themselves on behalf of CENAPI.

       However, if ATF or CENAPI does not collect tracing information
quickly, it becomes unavailable. In accordance with Mexican law, all guns
seized by the Mexican government must be surrendered to the Mexican
military, generally within 48 hours. We determined that after the Mexican
military obtains custody of the guns, ATF or CENAPI is unlikely to gain
timely access to them to gather the information needed to initiate traces.
Mexican military officials we interviewed said their role is to safeguard the
weapons and that they have no specific authority to assist in trafficking
investigations. Officially, these weapons are the property of the Mexican
court.

        To gain access to the weapons, ATF officials told us that they must
make a formal request to the Mexico Attorney General’s office for each gun,
(1) citing a specific reason that access is needed, (2) demonstrating that the
requested information is related to a Mexican criminal investigation, and (3)
providing a description of the gun with the serial number. Yet, if ATF had
the gun description and serial number, ATF officials would not need to
request access to the gun. Due to these barriers, ATF and wider
Department efforts to gain access to weapons in Mexican military custody
have not been successful. Because many weapons are transferred to the
military before basic information is collected, and many weapons for which

       92 U.S. Government Accountability Office, Firearms Trafficking: U.S. Efforts to

Combat Arms Trafficking to Mexico Face Planning and Coordination Challenges, GAO-09-709
(June 2009).


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information is available are not traced, the majority of seized Mexican crime
guns are not traced.

Most trace requests from Mexico have not been successful, and the success
rate has declined since the start of Project Gunrunner.

       Deployment of eTrace is only one barrier to ATF’s successful
development of intelligence through tracing of Mexican crime guns.
Although requests from Mexico increased from FY 2005 through FY 2009,
most traces were unsuccessful. Further, the success rate of Mexican crime
gun trace requests has declined since the start of Project Gunrunner. As
illustrated in Figure 8, in FY 2005, 44 percent (661 of 1,518) of Mexican
crime gun traces were successful. The success rate fell to 27 percent (4,059
of 14,979 in FY 2007 and remained only at 31 percent (6,664 of 21,726) in
FY 2009. We found that the rate of successful traces was far lower for
traces initiated in Mexico than for those initiated in the United States. By
comparison, successful traces from within the vicinity of ATF’s Houston
Field Division ranged from 64 percent in FY 2005 to 68 percent in FY 2009.

 Figure 8: Total Number of Mexican Crime Gun Traces and Number of
                  Successful Traces, by Fiscal Year

                           30,000


                           25,000


                           20,000


                           15,000


                           10,000


                            5,000


                                0
                                      2005   2006    2007     2008     2009
              Number of Unsucessful
                    Traces            857    1,063   10,920   19,541   15,062

              Number of Successful
                   Traces             661    841     4,059    6,360    6,664


        Source: OIG analysis of ATF data.

      Many of the reasons trace requests from Mexico were unsuccessful
are attributable to preventable human error. According to the National
Tracing Center and our own data analysis, an invalid serial number was the

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most common reason for unsuccessful traces from Mexico. The number of
trace requests from Mexico that failed because of serial number errors more
than doubled since Project Gunrunner began, increasing from 11 percent in
FY 2005 to 26 percent in FY 2009. Crime gun traces can be unsuccessful
for many other reasons. For example, a trace request may be unsuccessful
if no manufacturer or importer is identified, if the gun predates the start of
ATF’s tracing program in 1969, or if the necessary gun dealer records are
not obtainable. ATF staff in Mexico City told the OIG that they had noted
these types of errors on incoming requests and that these errors could be
prevented through training Mexican law enforcement personnel.

       However, we found that the training of Mexican law enforcement in
firearms identification has not resulted in accurate trace submissions by
Mexican law enforcement. ATF reported that between calendar years 2007
and 2009, it had trained 961 Mexican law enforcement personnel in
firearms identification and tracing. In discussions with the OIG, ATF and
Mexican authorities stated that further training is needed. The poor quality
of the tracing data and the resulting high rate of unsuccessful traces
suggest that either the training is insufficient, training has been provided to
the wrong people, or there are other unidentified problems with Mexican law
enforcement’s crime gun tracing.

Most successful Mexican crime gun trace requests were nonetheless
untimely and of limited use for generating investigative leads.

      Many ATF field and intelligence personnel told us that trace
information they received from successful traces on Mexican crime guns
was of limited use because the time-to-crime interval was too long.93
According to ATF staff, many successful traces of Mexican crime guns are
not worth acting upon because few federal prosecutors will accept cases
with a time-to-crime of over 3 years, and some will not accept a case with a
time-to-crime of over a year.94 The large majority of crime guns that are

       93 ATF defines time-to-crime as “the period of time (measured in days) between a
gun’s acquisition from a retail market and law enforcement’s recovery of that gun during
use, or suspected use, in a crime.” See ATF Order 3310.4B, Firearms Enforcement
Program (February 1989), 110. However, the time-to-crime data for Mexican crime guns is
not always based on the actual recovery date because, according to ATF personnel, when a
recovery date is unknown, ATF uses the trace request date to calculate the time-to-crime.
ATF personnel also said time-to-crime statistics for Mexican crime guns are skewed
because of a large amount of crime gun data the government of Mexico provided to ATF in
2009 regarding guns seized years before.

       94 The statute of limitations for straw purchasing-related crimes is 5 years. See 18

U.S.C. § 3282. Notwithstanding the 5-year statute of limitations, we found that many
Southwest border USAOs establish much shorter thresholds for the prosecution of these
types of cases. For example, the Northern District of Texas (encompassing ATF’s Dallas
Field Division) typically will not accept ATF straw purchasing-related cases with a time-to-
                                                                                        Cont.
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recovered in Mexico and traced – over 75 percent – have a time-to-crime of
over 5 years. Only 18.2 percent of recovered crime guns have a time-to­
crime of less than 3 years. Further, the long time-to-crime interval has
been exacerbated because ATF has been unable to gain timely access to the
guns seized by Mexican law enforcement.

       ATF officials told us that some gun trace requests submitted to ATF
by Mexican officials in 2009 were of guns that had been held in Mexican
federal storage for 3 years or longer prior to being submitted for tracing. In
one particularly large volume trace request from Mexican officials to ATF,
very few of the guns had been seized by Mexican law enforcement within the
year previous to the submission of the trace request. Consequently, this
information provided to ATF was of limited use for identifying ongoing
trafficking conspiracies.

Mexican law enforcement authorities do not view gun tracing as an
important investigative tool.

       We examined why Mexican law enforcement authorities do not
consistently submit guns for tracing or delay their submissions. In
interviews with us, Mexican law enforcement officials indicated a lack of
interest in tracing. One Mexican official stated that U.S. officials talk of
eTrace as if it is a “panacea” but that it does nothing for Mexican law
enforcement. An official in the Mexico Attorney General’s office told us he
felt eTrace is “some kind of bad joke.”

      Mexican officials told us that they are not satisfied with the details of
the information they receive on U.S. citizens and gun dealers from crime
gun trace requests they submit to ATF. The officials cited this as a reason
why they do not believe eTrace has benefit for Mexican law enforcement.
However, we found that the information that Mexican officials are seeking
extends beyond the information provided in trace results. 95 We asked
Department attorneys about the legal restrictions on ATF for sharing
investigative information about suspected firearms traffickers with the
government of Mexico. The attorneys stated that ATF may provide Mexican
law enforcement with most of the information that is returned in a typical
response to an eTrace request generated by Mexican officials. It is the
criminal history of suspected firearms traffickers that Mexican law
enforcement is seeking which is not a part of this typical eTrace response.

crime of more than 1 year, while the Southern District of Texas (encompassing the Houston
Field Division) established a threshold of less than 3 years for these cases.

       95 There is a memorandum of understanding between ATF and the Mexico Attorney

General’s office (including the office’s intelligence unit, CENAPI) governing Mexico’s use of
eTrace. The MOU does not state that Mexican eTrace users are to be provided any less
information than would U.S. law enforcement eTrace users.


U.S. Department of Justice                                                             78
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However, if an investigation results in an arrest, ATF will provide
information regarding the arrestee in response to an official request from
Mexico.

        ATF officials asserted that providing Mexican law enforcement
agencies with information on U.S. purchasers and gun dealers would be of
little use to Mexican authorities, whom cannot conduct investigations in the
United States. Rather, it is ATF’s responsibility to pursue crime gun trace
leads in the United States. ATF noted that firearms tracing is not designed
to “pinpoint the date, time, and place a firearm” crossed the border. ATF
further noted that even if additional, detailed information might contribute
to an investigation in Mexico, it would be unlikely to result in a prosecution
there, as less than 3 percent of Mexican investigations are brought to trial.

      We found that Mexican officials’ perception is that ATF does not
reciprocate information sharing with them. This remains an impediment to
reciprocity in coordination between ATF and Mexican law enforcement.

       Several ATF officials told us they are aware of the Mexican officials’
concerns and acknowledged that ATF has not adequately communicated the
value of tracing in generating leads from Mexican crime guns that can
ultimately serve to reduce firearms trafficking into Mexico and its associated
violence. For example, one ATF Special Agent in Charge stated, “Those guys
want to know what [the] information they are providing is doing, they want
to see results and I don’t think we [ATF] are doing that.” Another Southwest
border Special Agent in Charge told us, “One of the things we [ATF] do not
do well is take credit for what we do. The Mexicans say ‘Ok, you want us to
trace your guns, but the guns are already here. So what is it that tracing
does for us?’ We need to show them through training and success. We
don’t do that well in ATF.”

       We concluded that because ATF has not been able to communicate
the value of gun tracing to Mexican law enforcement officials, they are less
likely to prioritize their efforts to obtain tracing information from seized
crime guns and enter it into eTrace. This hinders ATF’s plans to deploy
Spanish eTrace throughout Mexico. Because the expansion of tracing in
Mexico is the “cornerstone” of Project Gunrunner, this presents a significant
barrier to the successful implementation of ATF’s Gunrunner strategy.




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Recommendations

       To gain better cooperation of Mexican law enforcement in tracing, and
to increase the timeliness of trace submissions from Mexico, we recommend
that ATF:

       11.	   Work with the government of Mexico to determine the causes of
              unsuccessful traces and develop actions to improve the rate of
              successful traces.
       12.	   Regularly and more effectively communicate ATF’s Project
              Gunrunner strategy to Mexican law enforcement authorities,
              including the value of gun tracing and the successes involving
              information or tracing information provided by Mexican
              agencies.




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       PART VI: ATF CHALLENGES IN COORDINATING IN MEXICO



       ATF has been unable to respond to many training and
       support requests from Mexican government agencies, and
       ATF’s backlog of requests for information from Mexican
       authorities has hindered coordination between ATF and
       Mexican law enforcement. In addition, ATF has not staffed
       or structured its Mexico Country Office to fully implement
       Project Gunrunner’s missions in Mexico. ATF faces
       challenges in coordinating with Mexican law enforcement
       authorities. There is no straightforward mechanism to
       facilitate the exchange of law enforcement information
       between ATF and a comparable Mexican law enforcement
       agency. Finally, ATF has not integrated the Project
       Gunrunner activities of its Southwest Border field divisions
       and its Mexico Country Office in a coordinated approach to
       reduce firearms trafficking from the United States to
       Mexico.


ATF has been unable to fully meet Mexican government requests
for support under Project Gunrunner.

      ATF’s Mexico Country Office is unable to fully meet the workload
associated with coordinating with Mexico due in part to a lack of resources.
Training in firearms trafficking enables Mexican law enforcement agencies
to become more effective partners for ATF, but ATF has been unable to
respond to many key requests for training. Assigning ATF personnel to
work directly with Mexican law enforcement is another way to enhance
coordination, but ATF has not been able to assign such staff for this
purpose. Additionally, we found that official requests to ATF from the
government of Mexico for information on gun traffickers are backlogged at
ATF’s Mexico Country Office.

ATF is not able to respond to many training requests from Mexico.

       ATF has provided training to help build Mexico’s capacity to conduct
its own operations to reduce firearms trafficking. In addition to the 961
Mexican law enforcement personnel that ATF trained in firearms
identification and tracing between calendar years 2007 and 2009, ATF also
trained 337 Mexican law enforcement personnel in firearms trafficking
investigations. However, Mexican officials have sought additional training
that ATF has not been able to provide. The Department of State’s Narcotics
Affairs Section, which facilitates funding for ATF to train Mexican law
enforcement, has funded this training. However, although the Department

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of State has access to funds to enable the training of Mexican law
enforcement, ATF has lacked the staff to provide additional requested
training on basic firearms investigations, weapons handling, and firearms
identification. For example, ATF has not been able to provide training at the
new Secretariat of Public Security Academy, a commitment ATF made as a
part of a wider Department plan to assist in training newly hired Mexican
law enforcement officers. ATF had planned to teach, at a minimum,
interrogation techniques there. Similarly, ATF has had to deny requests
from Mexican state and local law enforcement for training in weapons
handling and firearms identification and to deny CENAPI intelligence
analysts training in analytical intelligence techniques.

       Mexican law enforcement officials said they were disappointed that
ATF has not provided more training, although officials we interviewed were
appreciative of the training they have received so far. The Chief of CENAPI
said that more training is needed to develop institutional knowledge that
can be passed onto newer staff. A senior official from the Mexico Attorney
General’s office told us that the increased efforts in Mexican firearms
investigations meant that the corresponding training from ATF must be
expanded, noting specifically the need for firearms investigation and
intelligence training. We concluded that ATF’s inability to respond to
training requests has hindered the development of better Mexican law
enforcement capabilities that would support the goals of Project Gunrunner.

ATF’s backlog of requests from Mexican authorities for information impedes
coordination between ATF and Mexican law enforcement.

       ATF’s coordination with Mexican law enforcement is complicated by
the differences between the U.S. and Mexican legal systems. The Mutual
Legal Assistance Treaty with Mexico governs criminal justice interaction
between the two countries.96 The treaty mandates that except in urgent
cases and in informal exchanges, requests for assistance should take place
in writing and include certain information, such as the purpose for which
the evidence, information, or other assistance is sought. The Mutual Legal
Assistance Treaty states that both countries should “promptly comply with
the requests or, when appropriate, shall transmit them to other competent
authorities to do so.”

       In accordance with Article 4 of the treaty, Mexican law enforcement
officials send such requests in official communications called officios to ATF
in Spanish, thus requiring translation before ATF can take action. Some of
the most common requests in officios are criminal histories on gun
purchasers and detainees, and information from ATF interviews on

       96Treaty on Cooperation Between the United States of America and the United
Mexican States for Mutual Legal Assistance, Article 2, December 1987.


U.S. Department of Justice                                                      82
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individuals linked to a multiple handgun sale in the United States. Mexican
officials can use this information to generate an investigation in Mexico.
ATF must translate the reply into Spanish (the language of the requesting
government) before sending the information back to the requester.

      ATF has a backlog of officios that is hindering Mexico’s ability to
conduct criminal cases and is affecting the relationship between ATF and
Mexican law enforcement. As of June 2010, Mexico Country Office staff told
us that about 200 outstanding officios from Mexico are awaiting responses,
with 15 to 20 arriving every week. A Mexico Country Office official
estimated that even if no more officios were to arrive, it would still take staff
members assigned to that duty several months to process the current
backlog.

      In their discussions with us, Mexican law enforcement officials noted
the impact of these delays. Of particular concern to them was that Mexican
authorities would arrest suspects and send an officio to ATF for needed
information, but by the time ATF responded the Mexican authorities had
released the suspect due to lack of evidence. In addition, the lack of timely
support in this area made Mexican law enforcement officials question ATF’s
commitment to Project Gunrunner and to ATF’s Mexican law enforcement
partners.

ATF has not been able to assign personnel to work alongside Mexican law
enforcement.

       ATF has not been able to assign personnel to work directly with
Mexican law enforcement agencies, as it planned. In its 2010 Operations
Plan, ATF’s Mexico Country Office stated that it planned to embed ATF
personnel with their Mexican counterparts, including assigning an
intelligence analyst with CENAPI, one agent at the Secretariat of Public
Security’s headquarters, one agent in the Mexico Attorney General’s office’s
headquarters, and an ATF supervisor with the DEA’s Sensitive
Investigations Unit.97 ATF staff told us that embedding ATF personnel with
Mexican law enforcement is the best way to facilitate coordination and
enable Mexican law enforcement to conduct firearms trafficking
investigations. This method of coordination also has the full support of
Mexican law enforcement. The head of CENAPI, for example, told us he
supported the idea of embedding ATF personnel because he felt this would
help train his staff in firearms trafficking investigations to make his agency
more effective and would help facilitate the exchange of information.



       97The DEA’s Sensitive Investigations Unit is the vetted unit of Mexican law
enforcement officers overseen by the DEA.


U.S. Department of Justice                                                           83
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       However, as of June 2010, ATF has not yet been able to deploy any of
these personnel. ATF personnel in Mexico City also said they have been
unable to participate in several joint meetings, trainings, and exercises with
the Secretariat of Public Security, Mexico Attorney General’s office, and
other Mexican law enforcement agencies because of the lack of available
staff.

       One example of the impact of ATF’s inability to embed its staff with
Mexican law enforcement is the temporary deactivation of the Combined
Explosives Investigation Team, an ATF-initiated U.S.-Mexican group
composed of staff from the Mexican military, the Mexico Attorney General’s
office, Secretariat of Public Security, and an ATF Certified Explosive
Specialist and Explosives Enforcement Officer.98 This unit works
throughout Mexico responding to scenes where explosives were seized.
According to ATF and Mexican officials, this unit is highly regarded not only
by other ATF staff, but also by other U.S. law enforcement authorities and
especially Mexican law enforcement authorities. Beyond the individual
successes of the program, ATF staff who participated in the group told us
that they were able to work alongside their Mexican counterparts, which
enhanced ATF’s relationships with Mexican law enforcement. Despite the
successes of the unit and the progress it made in enhancing ATF’s
relationship with Mexican law enforcement officials, ATF Assistant Attachés
told us the group was deactivated in December 2009 over the objection of
Mexican law enforcement because the ATF Explosives Enforcement Officer
and Certified Explosive Specialist transferred out of Mexico. In March 2010,
ATF reactivated the team with newly assigned staff, augmented by Mexican
personnel.

ATF is unable to recruit sufficient qualified staff to fill positions in Mexico.

       ATF has experienced difficulties in recruiting qualified staff for its
Mexico Country Office, which hinders ATF’s ability to execute its already
challenging duties in Mexico. Given the small number of Spanish-speaking
employees throughout ATF, the fact that moving to Mexico is often a
hardship for staff and their families, and the lack of incentives for staff to
take this assignment, ATF has had difficulty attracting candidates for the
positions in Mexico. ATF officials reiterated that it does not have sufficient
number of Spanish-speaking agents to mandate Spanish language ability
for positions in Mexico. With the escalation of cartel-related violence and
the emphasis of Project Gunrunner, the need for ATF staff in Mexico has
risen (Figure 9). The number of staff as of June 2010 was more than four

        98 Certified Explosives Specialists are ATF agents who investigate violations of

federal explosives laws. Explosives Enforcement Officers specialize in explosives and bomb
disposal, provide explosives device determinations for criminal prosecutions, and conduct
explosives threat assessments of vulnerable buildings, airports, and national monuments.


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times what it was before Project Gunrunner in 2007, and ATF has plans to
assign more staff to Mexico.

                             Figure 9: ATF Permanent Staff Assigned in Mexico, 

                                          FY 2001 through 2010


                                           9

                                           8
                                                                                                               8
           Number of ATF Staff in Mexico



                                           7

                                           6
                                                                                                 5      5
                                           5

                                           4
                                                                     3      3
                                           3
                                                2      2      2                    2      2
                                           2

                                           1

                                           0
                                               2001   2002   2003   2004   2005   2006   2007   2008   2009   2010


         Note: Number of permanent staff at the end of each fiscal year (as of
         June 2010).
         Source: ATF International Affairs Office.

       Yet, in response to recruiting difficulties, ATF has been relying on
temporary duty (TDY) personnel in Mexico rather than permanent staff. As
of June 2010, ATF had 13 permanent or TDY staff assigned in Mexico, of
which 5 were on TDY status. ATF permanent staff in the Mexico Country
Office told the OIG that although they appreciated the assistance of the TDY
staff, permanent staff were more effective because they would be in Mexico
long enough to build effective relationships with Mexican counterparts and
learn the culture. The ATF staff in the Mexico Country Office also said that
it takes time for personnel to adjust and settle into living in Mexico, and the
cost of sending TDY staff to Mexico is much higher than that of a permanent
posting.

       Building working relationships with Mexican law enforcement and
government officials is important to the success of Project Gunrunner.
When ATF personnel are assigned to Mexico for less than a year, it makes
building effective relationships very difficult. The impact of the lack of
stability of ATF permanent staff in Mexico is compounded by the often high
turnover rate of Mexican law enforcement personnel. As an anti-corruption
measure, many Mexican law enforcement positions rotate personnel
frequently, as often as every 6 months. ATF officials told us this also affects
their relationship with Mexican law enforcement.
U.S. Department of Justice                                                                                           85
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      ATF staff in Mexico that we interviewed suggested several incentives
that would encourage qualified ATF staff to come to Mexico. They
suggested, for example, reclassifying the positions in Mexico. ATF Assistant
Attachés in Mexico City are GS-14s. In the United States, a GS-14 ATF
agent is a supervisor of an enforcement group (Group Supervisor or
Resident Agent in Charge). In ATF, serving as a supervisor is required for
promotion to the GS-15 level. However, assignment as a GS-14 Assistant
Attaché in Mexico does not count as a supervisory position. One Assistant
Attaché in Mexico cited this as being the primary reason he had decided to
transfer back to the United States. Similarly, time spent in Mexico does not
count as “headquarters time,” which also helps in advancing within ATF,
according to agents we interviewed. ATF agents suggested that Mexico
assignments should count as a supervisory assignment or a headquarters
assignment, or both.

       In response to a draft of this report, in September 2010 ATF reported
that all permanent positions in Mexico receive “headquarters credit” for
their tour of duty in Mexico. Further, ATF reported that it will upgrade the
Attaché position to the Senior Executive Service level to provide that
position with greater influence in interactions within ATF, and with
U.S. Embassy staff and the government of Mexico.

       Bonuses are another incentive that could help attract staff to Mexico.
Currently, DEA and FBI personnel qualify for, and receive, “Danger Pay,”
which provides increased compensation when assigned to one of several
cities in Mexico and other locations throughout the world.99 This incentive
is also used by the Department of State and other government agencies with
staff in areas eligible for Danger Pay. However, at the time of our site visit
to Mexico City in March 2010, ATF staff in Mexico were not receiving Danger
Pay.

      In response to a draft of this report, ATF informed us that in March
2010, the U.S. Department of State authorized Danger Pay of 15 percent for
ATF staff assigned to Monterrey, Tijuana, and Ciudad Juarez. ATF reported
that staff in those locations began receiving the pay effective March 14,
2010. Additionally, ATF reported that, as an incentive, all ATF staff
assigned to Mexico began receiving “Difficult to Staff Incentive Pay” of
15 percent in December 2009.

     Also, ATF staff in Mexico noted that the current 3-year tour of duty in
Mexico is an onerous obligation. The potential of violence in Mexico creates

         99 According to the U.S. Department of State, Danger Pay is additional

compensation above basic compensation for service at designated Danger Pay posts where
civil insurrection, terrorism, or war conditions threaten physical harm or imminent danger
to all U.S. government civilian employees.


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a higher burden on ATF personnel and their families than other posts. ATF
and Department officials told us that other federal agencies often send staff
on 2-year tours, which can be extended a year.

ATF’s Mexico Country Office requires stronger intelligence collection,
analysis, and dissemination capabilities.

       ATF’s Mexico Country Office does not currently have the capability to
collect, analyze, and disseminate all available intelligence from weapons
seizures occurring in Mexico. ATF personnel in the Mexico Country Office
focus their efforts on responding directly to seizure incidents in Mexico,
collecting crime gun information in conjunction with Mexican officials,
initiating traces, and receiving intelligence on suspected traffickers from
Mexican law enforcement. According to ATF officials, there are usually
about 120 to 150 gun seizures in Mexico per month. However, the small
staff in ATF’s Mexico Country Office is unable to respond to all seizures and
keep up with the analysis of intelligence and information.

       ATF’s process of collecting and analyzing information on weapons
seizures in Mexico is insufficient to develop intelligence to support firearms
trafficking investigations. When Mexico Country Office personnel receive
firearms seizure data from Mexican officials, the staff enters the data into
eTrace. Office staff attempts to enhance this intelligence with additional
information from Mexican law enforcement. However, this effort is limited
to ATF staff because the Foreign Service Nationals assigned to the Mexico
Country Office are not authorized to access ATF databases and therefore
have limited ability to assist with analyzing intelligence for dissemination
within ATF. Consequently, Office staff cannot collect information on many
firearms seizures in Mexico. ATF representatives at EPIC also collect
Mexican crime gun information from open sources such as Mexican
newspapers and reports. Office of Strategic Intelligence and Information’s
Southwest Border Field Intelligence Support Team links EPIC’s information
with additional intelligence and, when appropriate, sends the intelligence to
agents in the field as investigative leads. However, information collected by
EPIC often duplicates information already known by the Mexico Country
Office.

       In its Operations Plan for 2010, the ATF Mexico Country Office
identified a strategic goal to improve coordination, communication, and
information sharing on firearms seizures between U.S. and Mexican
agencies. To meet this goal, the Operations Plan identified a requirement to
assign a new, full-time ATF analyst to work with the Mexico City Intelligence
Community Group, a multi-agency intelligence group located at the
U.S. Embassy in Mexico City. Although the DEA has full-time
representation in this group, no one from ATF’s Mexico Country Office
participates as a full-time member of the group. We believe that the

U.S. Department of Justice                                               87
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development of better intelligence and information collection, analysis, and
dissemination capability at the Mexico Country Office would respond
directly to information sharing concerns expressed to us by officials in
Mexico.

ATF faces difficulty in coordinating with Mexican law enforcement
officials to implement Project Gunrunner.

       Despite ATF’s efforts with Project Gunrunner, lack of coordination
within the government of Mexico is hindering the success of Project
Gunrunner. However, we found that a pilot program of assigning a Mexico
Attorney General’s office representative to the Phoenix Field Division has
helped communication and information sharing between ATF and Mexican
officials.

Mexican officials are not well informed about Project Gunrunner.

       We found that senior Mexican law enforcement officials were often not
fully aware of Project Gunrunner’s goals, the results it has achieved, and
how the program can help reduce firearms trafficking into Mexico. For
example, some Mexican officials we interviewed were not aware of Project
Gunrunner’s successes or of the databases and information systems used to
support the project. One Mexican official asked the OIG, “What is it [Project
Gunrunner] exactly? Is eTrace part of it?” He complained that Project
Gunrunner is a term used as a “political reference point” but that he
“cannot see the effects of it.” ATF officials agreed that ATF is having
problems communicating its strategy and success stories to Mexican law
enforcement officials. The ATF Attaché in Mexico City noted the challenge
in measuring the impact of Project Gunrunner and that it is impossible to
quantify the number of guns that ATF prevented from entering Mexico as a
result of enforcement and regulatory programs. Other ATF officials
acknowledged that ATF has not adequately communicated about Project
Gunrunner with Mexican law enforcement officials. One Southwest border
Special Agent in Charge said, “I don’t think they [Mexican law enforcement]
really understand what we do.” He stated:

       We as an agency have failed to show them our success stories.
       ‘For the information you gave, this is what it has actually
       resulted in.’ . . . I think if we did a better job on our part, it
       would help. Those guys want to know what that information
       they are providing is doing, they want to see results, and I don’t
       think we [ATF] are doing that. . . . They would show some
       gratification and satisfaction and say, ‘Hey, that worked. We
       stopped this guy from running guns.’



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Internal coordination problems within the government of Mexico require ATF
to deal with multiple agencies and can slow information sharing.

       U.S. officials we interviewed also referred to problems in coordination
among the various Mexican law enforcement agencies responsible for
combating firearms trafficking. U.S. officials described being asked to serve
as intermediaries and to mediate disputes between Mexican agencies.
Because there is no equivalent to ATF in Mexico (a federal agency with
jurisdiction over firearms crimes), several different Mexican law enforcement
agencies work on these crimes, including the Mexico Attorney General’s
office, its intelligence branch CENAPI, the Mexican military, and the
Secretariat of Public Security. While noting that the lack of coordination
among Mexican law enforcement continues to be a problem, U.S. officials
also told us that there recently has been significant progress in getting
Mexican law enforcement agencies to work together, especially at meetings
like GC Armas.

       We found that that the monthly U.S.-Mexican GC Armas meetings
have to some extent improved information sharing between ATF and the
government of Mexico. The meetings are intended to coordinate joint U.S.­
Mexico operations related to the detection, monitoring, and detention of
firearms trafficking suspects crossing the border. According to U.S. and
Mexican law enforcement officials, the meetings have become an important
tool for agencies to share information. At the meetings, agency
representatives discuss their ongoing investigations and significant events.
They also frequently make requests and discuss planning for training and
intelligence needs. The Mexico Attorney General’s office also provides ATF
with a report of gun seizure information to be entered into eTrace.

      According to officials from the Department of State and ATF, although
there are problems with trust, and reservations about sharing information,
the U.S.-Mexican GC Armas meetings are developing into an effective venue
for sharing intelligence and information.

Information sharing between Mexican law enforcement and ATF could be
improved by embedding a Mexico Attorney General’s representative in each
of the ATF’s Southwest border field divisions.

      Beyond the ad hoc relationships formed by border liaisons, the Mexico
Country Office’s reliance on the formal officios process, or information
obtained from GC Armas meetings, ATF does not have a direct way to gain
information from Mexican law enforcement on firearms trafficking suspects.
However, in a pilot program in the Phoenix Field Division, a representative
from the Mexico Attorney General’s office is assigned to that division. This
representative is a bilingual prosecutor who works for the Mexico Attorney
General’s office’s intelligence branch, CENAPI, and has experience in

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firearms trafficking cases. He primarily responds to requests from the
Phoenix Field Division by querying Mexican databases on information about
suspects and other leads. He also educates ATF personnel on Mexican law
enforcement and educates Mexican law enforcement personnel on ATF.

       The representative told us, however, that he has been frustrated that
ATF has not been able to reciprocate the information sharing. Like his
counterparts in Mexico’s statements to us, the representative also cited the
need for more detailed information on suspected firearms traffickers who
are U.S. citizens. In July 2010, ATF headquarters staff told us that ATF is
drafting a Foreign Operations order that will address information sharing
protocols with the government of Mexico.

      According to the Phoenix Special Agent in Charge, the Mexico
Attorney General’s office representative has shown “the benefit to each
country of being able to have someone who will positively impact the illegal
flow of guns to Mexico.” One example that staff from the Phoenix Field
Division provided was proving the nexus of cases to Mexico, either through
sharing seizure information or information on a suspect in Mexico.
According to an Assistant Special Agent in Charge in Phoenix, this has
made the USAO more likely to accept cases that have such a nexus. The
representative also can provide information on interviews of suspects in
Mexico and other personal information such as criminal history and known
associates.

      The Phoenix Assistant Special Agent in Charge said he endorsed the
idea of having a Mexico Attorney General’s office representative in each of
ATF’s Southwest border field divisions. A senior official from that agency
agreed the arrangement is beneficial and supported sending additional
representatives.

ATF has not integrated the Project Gunrunner activities of its four
Southwest border field divisions and its Mexico Country Office in a
coordinated approach.

       To assess Project Gunrunner’s overall strategy, we reviewed ATF’s
June 2007 Gunrunner strategy, its 2009 National Firearms Trafficking
Enforcement Strategy and Implementation Plan, the 2009 firearms
trafficking implementation plans of ATF’s Southwest border field divisions,
and ATF’s Mexico Country Office 2010 Operations Plan.100 We found that

       100 We reviewed the Phoenix, Dallas, and Los Angeles Field Divisions’

implementation plans. The Houston Field Division did not provide any implementation
plan, as of July 2010. The Mexico Country Office is not considered a field division and,
accordingly, did not publish a firearms trafficking implementation plan. Rather, the Office
published a separate 2010 Operations Plan which addresses its role as a country team
                                                                                       Cont.
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these strategies and plans do not effectively address U.S.-Mexico
coordination, joint operations and activities, or intelligence sharing between
the field divisions and the Mexico Country Office. We believe this lack of
coordinated planning has contributed to various weaknesses in Project
Gunrunner, including unclear roles for border liaison personnel, inadequate
and disparate staffing in the Mexico Country Office, failure to focus on
complex conspiracy firearms trafficking investigations, and poor
coordination with U.S. and Mexican law enforcement agencies on both sides
of the border.

       For example, ATF’s June 2007 Gunrunner strategy specifically
identified the need for a Project Gunrunner strategy that would unite the
efforts of the four Southwest border field divisions and the Mexico Country
Office to “affect firearms and ammunition trafficking to Mexican-based
criminal organizations in both the U.S. and Mexico” and to “coordinate
intelligence and information-sharing packages with the Mexico Country
Office.” However, none of the plans that ATF provided to us fulfilled this
requirement, or explained how the Southwest border divisions and the
Mexico Country Office would work together.

       We found that Special Agents in Charge of the Southwest border field
divisions we visited did develop internal plans to guide their respective
Project Gunrunner regulatory and enforcement activities in their field
divisions. However, these plans did not address coordination with the ATF
Mexico Country Office. That Office is only briefly mentioned in one
Southwest border division’s firearms trafficking implementation plans and
the plan does not specify how or under what circumstances division staff
are to coordinate with the Office. Additionally, although the Mexico Country
Office’s 2010 Operations Plan states that the Office will assist in the
interdiction of illegal arms being trafficked to Mexico, the plan makes no
reference to Project Gunrunner.101

       Further, the majority (20 of 33) of the Southwest border field division
agents, intelligence personnel, and supervisors we interviewed told us they
had never heard of ATF’s 2009 National Firearms Trafficking Enforcement
Strategy and Implementation Plan, or that they had heard of the Strategy or
Plan but believed they had no impact. Staff of the ATF’s Mexico Country
Office also expressed concerns about ATF’s lack of an integrated strategy
and stated that the Southwest border field divisions communicated poorly
with them and each other. One Mexico Country Office official we


member at the U.S. Embassy. ATF Mexico Country Office Operations Plan for 2010,
“Benefits to Mission” (undated).

       101Appendix IV provides an overview of the implementations plans provided us by
ATF’s Phoenix, Dallas, and Los Angeles field divisions.


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interviewed stated, “ATF has no strategy . . . . The Southwest border field
divisions don’t talk to each other. There is no exchange of information.
Right now, the system [to exchange information] is broken.”

ATF has drafted a new strategy relating to Project Gunrunner.

       In September 2010, after we provided ATF with a draft of this report,
ATF issued a revised strategy for combating firearms trafficking to Mexico
and related violence. ATF’s new strategy included 13 key elements of a
revised approach to combating cartels, such as closer coordination with
other law enforcement agencies, particularly related to intelligence on drug
cartels; the need to improve intelligence collection, sharing, and analysis
and the prioritization of leads; improved coordination with Southwest border
field divisions and the Mexico Country Office, including the use of Border
Liaison Officers; focusing investigations on complex conspiracy cases and
entire trafficking rings; greater use of the OCDETF Program; and improved
investigative coordination and intelligence sharing with Mexican law
enforcement, including on gun tracing.

      ATF’s strategy document recognizes the need to address many of the
shortfalls we found in our review. However, the strategy document does not
provide detailed information on how ATF will implement and monitor efforts
to improve operations in the key areas it identified. We believe ATF’s
development of an implementation plan – with defined goals, specific
actions, and resources – is essential to the successful implementation of
improvements discussed in the September 2010 cartel strategy and also to
ATF’s overall effort to combat firearms trafficking to Mexico.

Recommendations

       We recommend that ATF:

       13. Develop better information sharing and intelligence analysis
           capability at its Mexico Country Office.

       14. In coordination with the Mexico Attorney General’s office,
           evaluate the mutual benefits, roles, and information sharing
           protocols of the Mexico Attorney General’s office representative
           pilot program to determine whether to expand the program to
           each of ATF’s Southwest border field divisions.

       15. Ensure that the reforms discussed in ATF’s September 2010
           document entitled “Project Gunrunner – A Cartel Focused
           Strategy” are fully and expeditiously implemented.



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                   CONCLUSION AND RECOMMENDATIONS 



      In implementing Project Gunrunner, ATF has increased several of its
key investigative and inspection program activities, such as the numbers of
cases referred for prosecution involving firearms trafficking to Mexico that is
fueling deadly violence along the Southwest border, traces of firearms from
Mexico, and gun dealer compliance inspections along the Southwest Border.

      However, we found significant weaknesses in ATF’s implementation of
Project Gunrunner that undermine its effectiveness.

       ATF does not use intelligence effectively to identify and target firearms
trafficking organizations on both sides of the border. ATF could improve in
four intelligence-related areas.

       For example, we concluded that ATF needs to better coordinate and
share strategic intelligence with the government of Mexico and with its
U.S. law enforcement partners. In this effort, ATF should develop processes
to systematically exchange timely and relevant intelligence with these
agencies on both sides of the border.

       ATF also needs to improve its own internal processes for collecting,
analyzing and disseminating intelligence sent to field agents. ATF Field
Intelligence Groups should work with their respective Southwest border
enforcement groups to develop guidelines for the production of timely and
relevant investigative leads. ATF managers need an automated system to
track, monitor the outcome of, and evaluate the usefulness of, investigative
leads.

       In addition, ATF needs to improve its sharing of firearms-trafficking
related information and techniques within its intelligence structure. ATF
Southwest border intelligence personnel need to more routinely exchange
information, analytical techniques, and best practices within and across
field divisions.

       ATF also needs to revisit its implementation of a key component of
Project Gunrunner – the Border Liaison Program. We found that the
liaisons need to coordinate their cross-border activities between their own
field divisions and ATF’s Mexico Country Office and need their roles more
clearly defined.

      Project Gunrunner’s investigative focus has largely remained on gun
dealer inspections and straw purchaser investigations, rather than targeting
higher-level traffickers and smugglers. As a result, ATF has not made full
use of the intelligence, technological, and prosecutorial resources that can
help ATF’s investigations reach into the higher levels of trafficking rings.
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ATF also needs to make better use of the OCDETF Program, to target the
higher levels of firearms trafficking rings.

       ATF did not effectively implement Project Gunrunner as a multi-
agency program. Despite the existence of an MOU between ATF and ICE,
collaboration between the agencies, which share jurisdiction over firearms
trafficking, must be improved. ATF needs to provide supplemental guidance
to field supervisors on the coordination of pertinent and necessary
information in areas of concurrent jurisdiction between ATF and ICE.

      ATF is unable to generate timely, actionable intelligence on suspected
firearms traffickers, in part because it cannot obtain accurate crime gun
trace data from Mexico. Many crime guns seized in Mexico are not traced,
and the percentage of traces successfully conducted is low and declining.
Even when traces succeed, the results are often untimely and cannot be
used to generate investigative leads. ATF needs to more effectively
communicate ATF’s Project Gunrunner strategy and the successes from
tracing information provided by Mexican agencies, to Mexican law
enforcement authorities.

       ATF has been unable to respond to many training, support and
information requests from government of Mexico agencies, and does not
have the staff it requires at its Mexico Country Office to fully do so. Nor has
ATF fully integrated the activities of its Southwest border field divisions and
the Mexico Country Office. ATF needs a better information sharing and
intelligence capability in its Mexico Country Office and to integrate activities
with the Southwest border field divisions.

       In this report, we make 15 recommendations to ATF to help improve
their efforts to combat firearms trafficking from the United States to Mexico.
Specifically, we recommend that ATF:

       1.	   Coordinate with the government of Mexico, the CBP, DEA and
             ICE to ensure systematic and regular exchanges of strategic
             intelligence to combat firearms trafficking to Mexico.

       2.	   Work with the Department to explore options for seeking a
             requirement for reporting multiple sales of long guns.

       3.	   Ensure that each Southwest border firearms trafficking
             enforcement group develops and regularly updates general
             guidelines for their Field Intelligence Group to follow that specify
             the most useful types of investigative leads.

       4.	   Develop an automated process that enables ATF managers to
             track and evaluate the usefulness of investigative leads provided
             to firearms trafficking enforcement groups.

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       5.	   Develop and implement procedures for Southwest border
             intelligence personnel to routinely exchange intelligence-related
             information in accordance with ATF Order 3700.2A and the
             Intelligence Collection Plan.

       6.	   Develop a method for Southwest border intelligence personnel to
             regularly share analytical techniques and best practices
             pertaining to Project Gunrunner.

       7.	   Formalize a position description that establishes minimum
             expectations regarding the roles and responsibilities of border
             liaisons.

       8.	   Focus on developing more complex conspiracy cases against
             higher level gun traffickers and gun trafficking conspirators.

       9.	   Send guidance to field management, agents, and intelligence staff
             encouraging them to participate in and exploit the resources and
             tools of the OCDETF Program, as directed in the Deputy Attorney
             General’s cartel strategy.

       10.	 Provide guidance to ATF field supervisors and agents to better
            coordinate with ICE, including direction on how to “coordinate all
            pertinent and necessary information” in areas of “concurrent
            jurisdiction,” as defined in the memorandum of understanding.

       11.	 Work with the government of Mexico to determine the causes of
            unsuccessful traces and develop actions to improve the rate of
            successful traces.

       12.	 Regularly and more effectively communicate ATF’s Project
            Gunrunner strategy to Mexican law enforcement authorities,
            including the value of gun tracing and the successes involving
            information or tracing information provided by Mexican agencies.

       13.	 Develop better information sharing and intelligence analysis
            capability at its Mexico Country Office.

       14.	 In coordination with the Mexico Attorney General’s office,
            evaluate the mutual benefits, roles, and information sharing
            protocols of the Mexico Attorney General’s office representative
            pilot program to determine whether to expand the program to
            each of ATF’s Southwest border field divisions.

       15.	 Ensure that the reforms discussed in ATF’s September 2010
            “Project Gunrunner – A Cartel Focused Strategy” are fully and
            expeditiously implemented.


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    APPENDIX I: TIMELINE OF KEY PROJECT GUNRUNNER EVENTS 



Year      Month           Activity
2005      June            Project Gunrunner pilot project in Laredo, Texas.
2006      April           Project Gunrunner official launch date.
2008      January         Expanded Project Gunrunner by adding 58 staff to the
                          Southwest border field divisions, 3 additional staff to EPIC, and
                          deploying eTrace to all U.S. consulates in Mexico.
          June            Merida Initiative signed into law, allocated $2 million to expand
                          Spanish eTrace throughout Mexico and Central America.
2009      February        The Recovery Act signed into law, allocated $10 million to ATF
                          for Project Gunrunner.
          March           White House announced enhanced action at the Southwest
                          border and the relocation of 100 personnel to the Southwest
                          border for 120 days via Gun Runner Impact Teams.
          June            Supplemental Appropriations Act of 2009 allocated an
                          additional $6 million to ATF for Project Gunrunner.
          September       New Gunrunner Teams established in El Centro, California;
                          McAllen, Texas; and Las Cruces and Roswell, New Mexico.
          December        Spanish eTrace piloted in Mexico.
2010      June            Deploy Spanish eTrace to Mexican state police laboratories.
          (In progress)
          August          Emergency Border Security Supplemental Appropriations Bill of
                          2010 allocated $37.5 million to ATF for Project Gunrunner.
          September       Hiring of 37 new staff with Recovery Act funds to be completed
          (Anticipated)   (89% complete as of June 2010).
                          New ATF offices in the U.S. consulates in Tijuana and Juarez
                          (75% complete as of June 2010).




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        APPENDIX II: POSITION DESCRIPTIONS FOR ATF STAFF 



      The information below was obtained from ATF’s official position
descriptions and interviews with ATF staff.

Special Agent (agent) federal law enforcement officers who generally
investigates criminal violations of federal laws that fall under the
jurisdiction of ATF such as arson and explosive cases, convicted felon in
possession of a gun, alcohol and tobacco crimes, and firearms trafficking.
They contribute to Project Gunrunner by investigating crimes linked to
firearms trafficking to Mexico, securing indictments from the Assistant
United States Attorneys, and arresting the individuals. Such crimes include
guns acquired by straw purchasers, corrupt gun dealers, and conspiracy
firearms trafficking cases.

Industry Operations Investigator generally conducts inspections of new
gun dealers and federal explosives licensees by reviewing records, inventory,
and the licensee’s conduct of business. They are also responsible for
training gun dealers on the relevant laws as well as detecting and
preventing firearms trafficking by noticing indicators and suspicious
behaviors. Industry Operations Investigators have an important role in
Project Gunrunner to educate gun dealers to avoid selling guns to suspected
firearms traffickers, provide intelligence and make referrals to ATF agents
when suspected firearms trafficking activity is taking place, and assist with
the analysis of gun dealers and the records they keep.

Intelligence Research Specialist performs in-depth intelligence analyses
in support of ATF operations. They provide intelligence products such as
link analyses, visual investigative analyses, and telephone toll record
analyses to provide ATF staff with information about ongoing or emerging
investigations. Intelligence Research Specialists also act in liaison and
coordination functions both within ATF (with headquarters and other field
offices) as well as with external partners, such as other federal law
enforcement.

Investigative Analyst functions in an investigative and research support
position for ATF which includes compiling information from ATF databases
on criminal leads and compiling reports for the use of ATF staff.
Investigative Analysts also perform many of the administrative functions for
an enforcement group or field office.

Area Supervisor typically manages a group of about 10 Industry Operations
Investigators, although these Industry Operations Investigators are
frequently dispersed throughout satellite offices. In addition to managing,

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hiring, and training, an area supervisor assigns Industry Operations
Investigators to inspect gun dealers as well as explosive dealers and, when
needed, receives referrals for criminal investigations from Industry
Operations Investigators and passes them on to the intelligence group.

Group Supervisor typically manages a group of about 10 agents who
comprise an enforcement group. He or she provides guidance and
supervision for criminal investigations and distributes work to these agents,
often based on referrals from intelligence and industry operations. A group
supervisor can also be called a “resident agent in charge” when the head of
an enforcement group located in a city that is not the field division
headquarters.

Director of Industry Operations is in charge of all the Industry Operations
Investigators and area supervisors within a field division. He or she
determines where to locate staff within the field division and decides which
gun dealers are inspected, usually based on the time since the last
compliance inspection.




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                           APPENDIX III: INTERVIEWS 



 Organization/Division            Position

 ATF Interviews

 ATF Headquarters                 Chief, Firearms Programs Division, Office of Field
                                  Operations
                                  Chief, Firearms Operations Division, Office of Field
                                  Operations
                                  Chief, Criminal Intelligence Division, OSII
                                  Field Intelligence Support Branch, Criminal Intelligence
                                  Division, OSII (x4)
                                  Program Manager, N-FOCIS Branch
                                  Chief, Office of International Affairs
                                  Chief of Staff, Office of Training and Professional
                                  Development
                                  Staff member, Special Operations Division
                                  Deputy Assistant Director, Field Operations (West)
 National Tracing Center          Chief, and Deputy Chief, National Tracing Center
                                  Branch Chief, Law Enforcement Support Branch
                                  Supervisory Analyst, Information Systems Analysis
                                  Group
                                  Branch Chief, Industry Records Branch
                                  Program Analyst, Firearms Tracing Branch,
                                  International Trace Section
 Violent Crime Analysis Branch    Branch Chief
 Los Angeles Field Division       Special Agent in Charge
                                  Assistant Special Agent in Charge (x2)
                                  Director of Industry Operations
                                  Area Supervisor
                                  Industry Operations Investigator
                                  Field Intelligence Group Supervisor
                                  Intelligence Research Specialist
                                  Industry Operations Intelligence Specialist
                                  Tracing Specialist, Regional Crime Gun Center
                                  Group Supervisor, Glendale
                                  Resident Agent in Charge, San Diego
                                  Resident Agent in Charge, El Centro
                                  Special Agent, Glendale
                                  Special Agent, San Diego
                                  Border Liaison Officer
 Phoenix Field Division           Special Agent in Charge
                                  Assistant Special Agent in Charge (x2)
                                  Director of Industry Operations
                                  Area Supervisor (x2)
                                  Field Intelligence Group Supervisor
                                  Intelligence Research Specialist/e-Trace Coordinator
                                  Intelligence Agent, Field Intelligence Group
                                  Group Supervisor
                                  Special Agent (x2)
 Dallas Field Division            Special Agent in Charge

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 Organization/Division            Position

                                  Assistant Special Agent in Charge (x2)
                                  Director of Industry Operations
                                  Area Supervisor
                                  Field Intelligence Group Supervisor
                                  Intelligence Research Specialist
                                  Industry Operations Intelligence Specialist
                                  Group Supervisor, Dallas
                                  Group Supervisor, Fort Worth
                                  Special Agent (x4)
 Mexico Country Office            Attaché to Mexico
                                  Assistant Attaché (x2)
                                  Special Agent
                                  Intelligence Research Specialist
                                  Foreign Service National (x4)
 Non-ATF Interviews

 Drug Enforcement                 Staff Coordinator, Operations Division, Office of Global
 Administration                   Enforcement, Mexico and Central America Section
                                  Mexico-Central America Intelligence Unit Chief, DEA
                                  Office of Strategic Intelligence
                                  Assistant Special Agent in Charge, Los Angeles Field
                                  Division
                                  Assistant Special Agent in Charge, Phoenix Field
                                  Division
                                  Assistant Special Agent in Charge, Dallas Field Division
                                  Regional Director, Mexico and Central America
                                  Division, Mexico City, Mexico
 Immigration and Custom           Chief, Office of Investigations, Contraband Smuggling
 Enforcement Headquarters         Unit; Program Manager, Operation Armas Cruzadas
                                  Assistant Special Agent in Charge, Los Angeles Field
                                  Division
                                  Special Agent in Charge, Phoenix Field Division
                                  Special Agent, Dallas Field Division
                                  Deputy Attaché, Mexico City, Mexico
 Customs and Border Protection    Director, International Affairs Office; International
 Headquarters                     Affairs Officer, International Affairs Office; Program
                                  Manager, Office of Field Operations; Assistant Chief,
                                  Southwest Border Division, Office of Border Patrol;
                                  Officer, Office of Border Patrol; Policy Advisor, Office of
                                  Policy and Planning; Liaison, Office of Air and Marine;
                                  Liaison, Office of International Affairs; Liaison, Office of
                                  Border Patrol; Liaison, Office of Training and
                                  Development
                                  Acting Assistant Director, Border Security, Los Angeles
                                  Field Office
                                  Lead Border Patrol Agent, U.S. Border Patrol, Marfa
                                  Sector Intelligence, Sierra Blanca, Texas
                                  Special Operations Supervisor, Canine Unit, El Paso,
                                  Texas
                                  Assistant Director for Border Security, U.S. Customs
                                  and Border Patrol, Tucson, Arizona
                                  Yuma Sector Chief, U.S. Border Patrol

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 Organization/Division              Position

                                    Attaché and Assistant Attaché to Mexico
 Executive Office for United        Project Safe Neighborhoods National Coordinator
 States Attorneys
 U.S. Attorney’s Office for the     Project Safe Neighborhood/Assistant United States
 Central District of California     Attorney; Assistant United States Attorney
 U.S. Attorney’s Office for the     Deputy Criminal Chief
 Northern District of Texas
 U.S. Attorney’s Office for the     Assistant United States Attorney
 Eastern District of Texas
 U.S. Attorney’s Office for         United States Attorney for Arizona and Assistant
 Arizona                            United States Attorney
 Criminal Division                  Deputy Assistant Attorney General
 International Affairs Office       Department of Justice Attaché to Mexico
 Office of Overseas Prosecutorial   Chief and Deputy Chief
 Development, Assistance, and
 Training
 Department of State                U.S. Ambassador to Mexico; Deputy Chief of Mission,
                                    U.S. Embassy in Mexico City
                                    Merida Coordinator, Bureau of International Narcotics
                                    and Law Enforcement Affairs
                                    Deputy Director and Drug Interdiction Program
                                    Coordinator, Narcotics Affairs Section, Mexico City,
                                    Mexico
                                    Assistant Regional Security Officer, Mexico City, Mexico
 Government Accountability          GAO Analyst-In-Charge, International Affairs Section,
 Office                             Washington DC
 Mexican Government Interviews

 Mexican Military                   Senior Officers
 PGR                                Assistant Attorney General for Special Investigations
                                    and Organized Crime, representatives from the Special
                                    Unit for Investigation into Crimes Against Health and
                                    the Special Unit for Investigation of Terrorism, Arms
                                    Stockpiling and Trafficking.
 PGR-CENAPI                         Director of CENAPI along with representatives from the
                                    General Analysis Against Crime, Office of International
                                    Analysis, Office of Weapons and Armed Groups, Office
                                    of Information against Kidnappings and other Crimes,
                                    Directorate of Firearms and Explosives.
                                    PGR-CENAPI Representative to ATF Phoenix Field
                                    Division
 Secretariat of Public Security     Representative from the International Affairs Office (x2)
 Mexican Secretariat of Foreign     Representative from the Directorate of North America
 Affairs                            (x2)




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      APPENDIX IV: ATF SOUTHWEST BORDER FIELD DIVISIONS’ 

         FIREARMS TRAFFICKING IMPLEMENTATION PLANS 



 Phoenix                Developed a strategy of intelligence-lead policing whereby the
                         Field Intelligence Group will analyze and disseminate leads, as
                         the point of contact for other field divisions and agencies.
                        Two agents each dedicated full time to the Phoenix and Tucson
                         OCDETF.
                        Border liaison officers in Phoenix, Tucson, and Yuma, Arizona.
                        Embedded a representative from the Mexico Attorney General’s
                         office (CENAPI).*
                        Conducted a conference call with Los Angeles and San Francisco
                         Field Divisions.
                        Industry Operations would target high-risk gun dealers for
                         inspections based on risk factors found through intelligence.
 Dallas                 Field Intelligence Group will coordinate trafficking intelligence to
                         appropriate field offices, within ATF including the Mexico Country
                         Office and Southwest border Field Intelligence Groups, and other
                         law enforcement.
                        Field Intelligence Group will be the conduit between law
                         enforcement and Industry Operations, with regular collaboration
                         between the two.
                        Border liaison officer in El Paso, Texas.
                        Due to close proximity to the border, agents work closely with
                         other federal agencies (DEA and ICE) and local police.
                        Train and coordinate U.S. Attorneys and local prosecutors, to
                         ensure that cases are successfully prosecuted.
                        Industry Operations will conduct focused inspections on gun
                         dealers who show indicators of firearms trafficking.
 Los Angeles            Field Intelligence Group will analyze information and leads to
                         assign to field offices for investigation.
                        Conference calls will be conducted between the Los Angeles, San
                         Francisco, and Phoenix field divisions for coordination and
                         information sharing between field divisions.
                        Border liaison officer in San Diego, California.
                        Firearms trafficking group (San Diego I) works with local law
                         enforcement, ICE, the FBI, and through the border liaison,
                         Mexican law enforcement
                        Will coordinate with U.S. Attorneys and county District Attorneys
                         to address issues in cases so fast and successful prosecutions
                         can occur
* The representative from the Mexico Attorney General’s office was a pilot program that was
to be evaluated in summer 2010.




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APPENDIX V: THE BUREAU OF ALCOHOL, TOBACCO, FIREARMS AND 

              EXPLOSIVES’ AMENDED RESPONSE 



                                                     U.S. Department of Justice

                                                     Bureau of Alcohol, Tobacco,
                                                     Frreanns and Explosives

                                                     Office of the Director

                                                     Washia.SlOn. DC 20226




                                           October21 ,2010




    Mr. Michael D. Gulledge
    Assistant Inspector General for Evaluation and Inspections
    United States Department of Justice
    Office of the Inspector General
    1425 New York Avenue, NW
    Suite 6100
    Washington, DC 20530


    Dear Mr. Gullcdge:

    The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) appreciates the opportunity to
    review and comment on the Office of the Inspector General 's (OIG) formal draft report entitled
    "Review of A TF's Project Gunrunner." While the OIG's review identified several areas for
    improvement, it also found a number of significant accomplishments as a result of ATF's Project
    Gunrunner, including the increased number of investigations initiated, the number of eases and
    defendants referred to United States Attorney's Offices (USA Os), the number of gun deale r
    compliance inspections along the Southwest Border, the number of compl iance inspection hours
    worked, and ATF Industry Operations referrals made to ATF criminal investigators. It is worth
    noting that these advances were made at the same time AIT faced significant challcnges to the
    expansion of Project Gunrunner. We are committed to building on these successes and
    improving Ute program in the areas identified by the 01G.

    As the OIG review reports, Project Gunrunner has increased the number of investigations
    initiated by 109%, the number of cases and defendants referrcd to United States Attorney's
    Offices (USA Os) by 54%, the number of gun dealer compliance inspections along the Southwest
    Border by 133%, thc number of compliance inspection hours worked by 102%, and the number
    of ATF Industry Operations referrals made to ATF criminal investigators by 47%. These
    statistics represent only part of the accomplishments achieved under Project Gunrunner.

    FY 2006 through FY 2009:

    When all of the data is considered, including cases Utat were investigated and developed by ATF.
    then refcrred to state and local courts for prosecution, thc rcsults show that:




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     Assistant Inspector General for Evaluation and Inspections
     Michael D. Gulledge

        •   1,256 defendants have been recommended for prosecution.

        • 5,457 firearms and 535,262 rounds of ammunition that are not in Mexico or being used in
          crimes of violence because they are in ATF evidence vaults.

        • 608 defendants are serving an average of 94 months in prison and an additional 198 are
          under the supervision of the court for an average of 41 months.

        •   233 defendants have been convicted and await their sentence.

        • 789 defendants (63 percent of all defendants recommended for prosecution) faced
          cbarges related to ftreanns trafficking.

        •   ATF conducted 6.676 compliance inspections.

        •   ATF investigators identified 49,625 firearms that Federal Fireanns Licensees could not
            locate in inventory or account for by sale or other disposition. By working with industry
            members. Industry Operations Investigators (lOis) located either the firearms or the
            records to confirm the disposition of 43.249. or 87% of the missing firearms.

        • ATF's lOIs reviewed over I million firearm transaction records to both validate their
          correct and accurate completion as well as glean investigative leads regarding pauems of
          purchases.

     (please see attachment entitled: "PROJECT GUNRUNNER CASES AND DEFENDANTS
     RECOMMENDED FOR PROSECUTION FY 2006 THROUGH FY 2009")

     Review of the Gunrunner program requires in-depth knowledge and understanding of the context
     in which the Gunrunner program resides, the available resources, and the limitations imposed on
     the program. Although we believe the OIG review covered significant portions of the program,
     we believe some of those areas would have benefitted from a more comprehensive review and
     analysis. For example, the absence of substantive interviews of the current or fonner Assistant
     Director for Field Operations, the Assistant Director for Strategic Intelligence and Information
     (OSI!). the Deputy Assistant Director with responsibility for Project Guruunner (including the
     four Southwest Border field divisions, and ATF's Office of International Affairs), or the Deputy
     Assistant Director for Industry Operations limits the completeness of the OIG review. These
     interviews would have provided an important historical perspective, put Project Gunrunner in its
     proper context within ATFt s overall strategy for combating gun crime and described ATP's
     plans for the program.



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 Assistant Inspector General for Evaluation and Inspections
 Michael D. Gulledge

Project Gunrunner is a focused subset of ATF's broader fireanns enforcement program to reduce
violent crime by stemming the flow of firearms from lcgal to illegal commerce on a national and
international level. The OIG suggests the absence of a strategic approach to Project Gunrunner.
This is belied by the existence of the many documents referred to in the review including ATF's
cartel strategy. Contrary to the ~IG's statement that ATF's cartel strategy was developed as a
response to their working draft report, it was in fact developed over several months to
communicate further refined Project Gunrunner enforcement slJategies to the entire ATF
organization.

While the OIG report reflects the amount and approximate timing of the appropriated funds
received to support Project Gunrunner, it fails to provide the full funding context of the
implementation of Project GuoruMer. In particular, we note that because ATF first received
funding for Project GuoruMer on March 3, 2009, and this review was initiated 48 working days
later, the ~IG's review was premarure. To be clcar, ATF initiated Project Guruunner as an
emerging priority beginning in 2006. From 2006 through March of2009, across three flat fiscal
year budgets, ATF redirected base budget resourees and 54 special agent and 32 industry
operations investigator personnel to Project Gunrunner absent any new funding. In the early
days of Project GuoruMer, ATF prioririz.cd its limited resouroes on achieving an immediate
operational impact and placed agents and lOIs on the border as a primary means to stem the flow
of firearms to Mexico. In the absence of new funding, the needed administrative and intelligence
support positions were deferred and the significant expense of placing additional personnel in
Mexico on a permanent basis was simply not possible.

From the ~IG'. presentation of the Project Gunrunner budge~ and the expansion of domestic,
and intemational stalflDg, one might infer that ATF had full access to unconStrained resources
and that there are and were no challenges in the expansion of Project Gunrunner. In contrast,
new personnel resources and funding were provided in increments over time, raising the related
challenges of transferring existing personnel or quickly hiring, training, and placing new
government pexsonnei in newly created offices, in order to begin to expand ATF's impact. In
fact, in March of2009, ATF received fundiog ood authorilAtion for only seven of the 23
personnel required to expand ATF's intelligence and information sharing capabilities both
domestically and internationally. The remaining 16 positions wcre not authorized or funded
before FY 2010.

In mooy sections of the review, the DIG review tends to lose sight of the complete purpose of
Project Gunrunner. In Parts II and 1Il of the review the orG focuses only on the firearms
trafficking elements of Project Gunrunner, to the exclusion of discussing the equally important
and intimately related purpose of reducing the high level of violence associated with cross border
dmg and firearms trafficking. This is evideot in the discussion of single defendant versus



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   Assi_t Inspector General for Evaluation and Inspections
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    complex cases and the comparative penalties m:eived for drug trafficking versus firearms
  . trafficking cases. In both situations, the focus is on firearms trafficking related offenses. The
   OIG does not address the substantial and important work (including many single defendant
   cases) undertaken to reduce violent crime.

   Further, in their review, the OIG evaluated the number of criminal cases initiated under Project
   Gunrunner, but did not address the many intelligence cases ATF developed in support of Project
  Gunnuwer 10 docwnent seizures of fireanns in Mexico andlor leads developed in the United
  States. We believc this omission uudmtates the ATF's proactive efforts in addressing the
  intelligence requirements of Project Gunrunner. While much of the infonmation in these
  intelligence eases is derived from open source seizure infonnation from Mexico. this inCannation
  often provides the who, what, when, where, and why surrounding a fucarms seizure that is
  frequently omitted from a trace request. By entering this infonmation into N-Force, any ATf
  intelligence analyst at Headquarters, El Paso Intelligence Center (EPIC), or in the field can
  monitor and query this dats. Once trace data is entered into cTrace, ATF analysts can bsclcfill
  the N-Fon:e data where applicable and notify the field of any links to on-going Project
  Gunrunner investigstions. In this way, Mexican data, including DTO affiliation, can be added to
  fireanns trace data, to support on·going investigations or to generate Dew investigative leads.

  In genera1, ATF is concerned that this review docs not adequately rellect the challenges that the
  United States and MexiCan governments face in trying to reduce violence, gun trafficking and
  drug trafficking along and across the border. Specifically, there have been significant challenges
  given the differences between the Mexican and United States legal systems, the investigative
  capabilities and resoun:es, and the culture and laws relating to fireanms possession.

  ATF bss a distinct and proud heritage of sharing infonmation with State and local police officers
  with the sole goal of reducing violent crime. This is no difference with our mission in Mexico.
  We are currently operating in an unprecedented capacity in Mexico and provide more assistance
  regarding firearms trafficking and explosives investigations than ever before. Our work in
  Mexico has not been without challenges, including effective sharing of information.
  AccoCdingly, these very dynamic circumstaoces create infonmation sharing challenges that ATF
  and the Government of Mexico are diligently collaborating to overcome.

  During FY 2010 ATF developed an internal publication entitled, "Project Gnnrunner - A Cartel
  Focused Strategy." Ali the OIG notes in their review, this strategy addresses most of the
  recommendations contained in the OIG review. AccoCdingly, ATF believes that many of the
  recommendations made below have already been addressed and the OIG should note this in their
  review. Nonetheless, ATF's response to the OIO's specific recommendations follows:




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    AssiJIant 1nspeetcr Geneml for Evaluation and Inspections
    Micllael D, OuIIedge


                            ATF's Respo1fle to die O[G RecommendfllWn$

    1_ Coonllntlte with tile government ofMexko, 'he CB', DEA lind ICE to enlure systematic
    BIId reguhu exchBllges oJI1mtegle intelligence to com6at/lI'etfI'mS tM/fdlng to MexIcr!,

   ATF concurs, ATF bas been and will eonlillue tomduate and refine protocols for sharing
   strategic; intelligence with the Government of Mexico md our domestic partners. For example,
   ATF's National Ounnlllller Coordinator md osn recently initiated eonrdinstion with ICE md
   CBP. ATF's National Coordinator attended the DHS "BEST" conference in San Diego in
   August 2010 where he inteJ:faeod with program level personnel, The National Coon.linstor
   continues to co-cl!air with m ICE representative the development and implementation of the
   ONDCPSouthwest Border COllIltermIreoties Strategy, Chapter 7, Weapons, In September 2010,
   ATF's Criminsl IlIwUigenee Division Chief, md the Gunrunner National Coordlnstor initiated
   m.eeQngs with ICE md CBP Southwest Border coordinators in Headquarters, Another
   eoordinstion meeting is scheduled for October 2010 in Sm Diego.

    In October 2010, ATFparticipated in II bilatera1joint MexicolUnited States conference basted by
    the United States Ambassador in Mexico City that focused on dismIIlItling the toob or      .
    lnI/lSllational crime. The Arms Trafficking workshop was chaired by the ATF Deputy Director
    and the Direetor of CENAPI, The principal topies of discussion included the eTrac:e
    implementation plan, the mellllS md milliner of the transportation of fiRarms into Mexico, md
   .strategic and tactical information sharing,

   Owing the workshop, ATF agreed to aeoeIerate eTrace training to pre-identified POR personnel
   located in each of the states in Mexico md provide them access to the system to aid in the thuely
   input oftrace requests of seized fireamIs. ATF also offered CENAPl to place a representative at
   EPIC in ATFs Firearms and Elqllosives Intelligence Team to improve the facilitation and
   sharing of real time actionable information. ATF also ngreed 10 provide regular intelligenee
   bullelills, recently ueated by ATF at EPIC that eontain aggregate trace information that among .
   other things will assist with identifYing firearms trafficking treods. These bulletins also contain
   information regarding ATF investigations including defendmlS, seizure, md other investigative
   information.

   ATF also eoeouraged Mexico to make use of ATFs explosives expertise through the Combined
   Explosives Investigations Tesro for response to signifiCllllt explosives seizures or bombings to
   assist with explosives identification and post blast investigation.




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  Assistant Inspector General for Evaluation and Inspections
  Michael D. Gulledge


  2. Work wilh the Department to up/on options for seeking a requirement for reporting 0/
  multiple sales o[long guns.

  A IF concurs, but notes that this may require a change to the Gun Control Act which is beyond
  ATF's and the Department's authority. ATF will explore the full range of options to seek
  information regarding multiple sales anong guns.

 J. Ensure IhQJ each SoUlllwesl borde,. jifeanm trajJ1I:klng eliforcement group develops and
 reguiarly updIltes general gu/delint!Sfor their Field [nldl/gence Group to 'oHow II,at specify
 tlJe most useful types ofinvestigative leaf's.

 ATF concurs. KIT's Headquarters bas communicated and will continue to reinforce the
 guidance previously provided to FIGs tIuough the Southwest Border Collection Plan, the FIG
 Group Supervisor Guidebooks, ~ational training conferences. and policy documents. These
 materials and training include guidance related to coordination between FiGs and the respective
 field offices in the development of local guidelines for the referral of investigative leads.
 Additionally, a firearms trafficking coordinator (Assistant Special Agent in Charge (ASAC»
 from eacb division attended the August 2010 FIG national training conference in Washington,
 DC.

 In August 20 I0, Directors of IndustJy Operations (DIOs) in the Southwest Border field divisions
 were asked for assistance in identifying and updating the indicators of firearms trafficking and
 straw pW'Chasing. lIDs information will be collected, analyzed, and disseminated to the field, for
 incorporation into the licensee risk assessment process for the inspection plans and the
 subsequent compliance inspections. This information will also support the enhancement of
 referrals generated from compliance inspections.

 Finally, ATF has scheduled a Project Gwuunner coordination conference at EPIC in December
 2010, for all SACs, ASACs, DIOs, RACs, GSs, and FIG supervisors for field divisions/field
 offices with designated Gunrunner groups, border liaison agents, and members of the
 International Affairs Office, the MCO, and the OSU Criminal Intelligence Division, Southwest
 Border Field Intelligence Support Team (FIS1), and ATF EPIC stalf.

 4. DnelDp an auiomoted process that elllwies ATF managers to tmek and evaluate tire
 usefulness of illW!Stiga/iw leads provided to fU'eanns trafficiUng enforcement groups.

 ATF concurs. In September 2010, ATF awarded a contract to begin business process
 reengineering (BPR) of its case management and related business processes. This BPR effort




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   Assistant Inspector General for Evaluation and Inspections
   Michael D. Gulledge

  , will eXllllline the flow of information thrnugbOUl ATF, acknowledging the close relationship of
    our regulatory mission and our law enforcement mission and the need for information, including
    referrals of information and investigative leads, to be exchanged seamlessly across those
    missions.

  The BPR will also address the need for better integration between our case' management
  system(s) and our firearms information systems, including eTrace and the Firearms Trw:ing
  System, to streamline processes and eliminate duplication of data entry. Completion of the BPR
  effort is expected by mid FY 2012. The BPR will produce as its deliverable, a set of
  reengineercd b1l!iness processes and requirements for ATF's next·genemtion case management
  system. Completing a BPR is a recognized best prw:tice prior to completing requirements for a
  new system or identifying a technical solution.

  ATF will use the results of the BPR and the requirements developed from it to identify the best
  solution. There are no credible estimates of the cost of a replacement system pending the
  outcome of the BPR and no fUnding stream has been identified. ATF does not contemplate
  identifying, aoquiring, and implementing an automated solution in order to resolve this
  recommendation before FY 2014.

  While awaiting necessary fUnding and system enhancements to automate the tracking and
  evaluation of investigative leads, ATF will assess existing guidance regarding the "manual"
  exchange and documentation of referrals between industry operations, FIGs, and criminal
  enforcement field offices. Ifopportunities for increased efficiency and effectiveness are
  identified, ATF will issue revised guidance to field personnel.

  S. D...rop IJlIIi Implemenl proctdJtrts for So.,hllltSl Border inlelligence personnello
  routinely txt:hange inkUigence-rtl4kd infomuulon, ln accordance witlr ATF Order 3700.2A
  and Ihe [nltUlgence Colhcllon Plan.

  ATF concurs. As discossed in its response to recommendation number I, ATF luis been and will
  continue to ensure systematic exchanges of information. ATF will also further review ATF
  Order 3700.2A for poteotial revisions responsive to the OlG's recommendations.

  6. DeVIIlop a metlrodfar SouthllltSl barder inltlJlgence persqnnello regularly share analytical
  lechni4uts and bal practkes pertaining 10 Project Gunrunner.

  ATF concurs. ATF has taken and will continue to take steps to improve in this area as noted in
  response to recommendations numbers 3 and 5. In addition, FIG persoanel perticipate in


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   Assistant Inspector General for Evaluation and Inspections
   Michael D. Gulledge

  periodic conference calls involving their respective FIST and regional FIGs, during which
  analytical techniques and best practices may be discussed. There is a FIST dedicated to the
  Southwest Border field divisions.

  7. ForllUllize a posidon description tl,at establisl,es minimum expectations regarding the roles
  and responsibilities 0/ border liaisons.

  ATF concurs in the recommendation to provide a more detailed description of the roles and
  responsibilities of border liaisons, but does not believe that a unique position description is
  necessary. The general duties and role of the BLO were addressed within ATF's "Project
  Gunrunner - A Cartel Focused Strategy," which was disseminated to Field Operations personnel
  in September 2010. ATF will further document the roles and responsibilities ofBLOs in an ATF
  order addressing international operations. The order will include details such as qualifications;
  selection; role, responsibilities, and authorities; area of responsibility; coordination with and
  between the field division and the respective country office; training and development; and
  administrative matters such as passports, country clearances, expenses and equipment.

  8. Focus on developing more complex conspiracy cases against higher level gun traffICkers
  and gun trafficking c()nspiriltors.

  ATF concurs. ATF bas and will continue to develop complex conspiracy cases. ATF will
  reinforce previously issued guidance including the National Firearms Trafficking Enforcement·
  Strategy and Implementation Plan and "Project Gunrunner - A Cartel Focused Strategy." ATF
  is working with the Department of Justice, Criminal Division and United States Attorney's
  Offices to bring prosecutors and agents from both sides of the border together to work on .
  enhancing this effort.

  9. Send guidance to field nianagemen4 agents, and inteUigence staff encouraging them to
  participate in and exploit the resources and tools o/the OCDETF Program, as directed in the
  Deputy Attorney General's Cartel Strategy.

  ATF concurs. ATF has prioritized multi-defendant complex investigations related to Southwest
  Borderfirea.nn!i: trafficking and violence during monthly management conference calls,
  management meetings and other venues and will continue to do so. To more formally
  communicate this priority and targeting strategy, during FY 2010 Field Operations developed an
  internal publication entitled, "Project Gunrunner - A Cartel Focused Strategy." Portions of the
  strategy highlight participation in the OCDETF Program. ATF will develop a mandatory roll
  call training package related to the OCDETF Program for all special agents in the field.



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   Assistant Inspeetor General for Evatuatiollud InspectiOllS
   Michael D. Gulledge

   The April 2009 memo from the ADAGIDirector ofOCDETF stated that firearms trafficking
   eases with a nexus to Mexlcu DTOs are eligible for the OCDETF program. Guidance regarding
   increased emphasis on OCDETF program participation was commtmicated to the field by
   memorandum dated September 15,2009. ATF notes thllt prior to this OCDETF policy guidance..
   ATF efforts to utili1.e the OCDETF Program for investigatiolls principally wgeting firearms
   trafficking to DTOs :frequently met negative results if significant Title 21 violations.larpIS. ud
   agencies with Title 2] authority were not involved. ATF also notes that we worked olosely with
   the Department of Justice (DO}) ud OCDETF in development of the DOJ certel strategy, as
   well as ONDCP in the development of its .June 2009 Southwest Border Countemarcotics
   Slratesy. which for the first time reco~ the significance of firearms trafficking and devoted
   a chapter to southbound weapons enforcement initistives.

    Finally, ATF submits that ATF's participation within the OCDETF PrOgram, including multi­
   agency OCDETF investigations led or co-sponsored by ATF, as well as ATF's participation and
   lead on OCDETF strike forces, has been increasing and is substantial in relation to the OCDrn
   fiIlldina Ihet ATF receives. For example, in FY 2009, ATF received SII.436M and 54 F'TE for
   OCDrn, but actually utilized 130 PTE toward OCDrn, resulting in an over bum of76 FTE.
   In 2010, ATF OCDETF funding increased. providing for 11 additional PTE, which will increase
   ATF participation in OCDETF strike forces, DBA Special Operstions Division, ud the
   OCDrn Fusion Center. OCDETF also awardedATF $IM for Southwest Border activities and,
  .based upon ATF's OOIltinued superior performance in aCDrn T·1Il investigations. received II
   5500,000 OCDETF case funding lIugmenlation to lIUpport investigations in the field. ATF plans
   to co-lQQate new GuMlnner gmups in El Paso and Atlanta within the Strike Forces.

  1(}'PrtwJde guitlance to AUjleld supemso,s and agenls to belt" coordinate with ICE,
  inc1utlJnr dinctIofl on how to "CtJtJfdlttate fill ptlrtitllmt and neceS8ary tn/OI7IfllIibn" ifl aret16 01
  "conclII'rttntjurisdiction, ,. as defined ifI tlltl memorand"m 01understand;flg.

  ATF concurs. ATF is implementing this recommendation lis discussed in respollSes to
 . recommendations n1.llIlbers 3, 4, 5, 6, 8, and 9.                        .

  In addition, the following text, evidencing the perspective of the Deputy Director of ICE on the
  working reIstionship between ATF and ICE has been provided to the Ola by ICE:

          "In early Oetober 2010, Immigration and Customs Enforcement (ICE) lIUbmitted It
          lengthy and detailed account of its successful interaction with the Bureau of Alcohol
          Tobacco Firearms and Explosives (BATFE), between June 2009 and September 2010.
          The document included general coUaborstive efforts in which ICE and SATFE have




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   Assistant Inspector General for Evaluation and Inspections
   Michael D. Gulledge

           engaged to ensure continuous collaboration and integration of efforts to address
          enforcement of the various laws in which both agencies' enforcement responsibilities
          intersect. However, the document also provided specific information regar~ng 113
          investigations in which ICE and BATFE have coordinated efforts to pursue investigative
          leads related to a variety of violations, which include the smuggling of weapons,
          ammunition, explosives and cigarettes, as well as prohibited possessor violations. Of
          these 113joint investigations, 37 specifically address the smuggling of weapons,
          explosives, ammunition, and components from the United States to Mexico. The most
          relevant cumulative enforcement results derived from these 37 investigations include, but
          are not limited to, the following:

          COMMODITY SEIZED                            QUANTITY SEIZED

         ARRESTS:                                                  119
         FIREARMS:                                                756
         INERT GRENADES:                                          114
         DETONATING FUSES:                                        114
         IMPROVISED EXPLOSIVES:                                     304
         AMMUNITION                                             32,510 ROUNDS
         WEAPON COMPONENTS:                                          12
         WEAPON MAGAZINES:                                         118
         BALLISTIC VESTS:                                            11
         VEHICLES SEIZED:                                            12
         MARIJUANA SEIZED:                                       4,917KGS
         HEROIN SEIZED:                                             17.8 KGS
         METHAMPHETAMINE SEIZED:                                    20.4KGS

         Although the challenge before us is of great magnitude, ICE and BATFE have
         undoubtedly proven a strong willingness and a proactive approach to integrating efforts
        ·that address existing shortcomings to enhance the U.S. government's ability to identify
         and target those who violate our weapon related laws."

  11. Work with the government ofMexico to determine tl,e causes of unsuccessful traces and
  develop actions to improve ti,e rilte ofsuccessful traces.

  ATF concurs. ATF has and will continue to work with the Government of Mexico to increase
  the rate of successful traces, through comprehensive deployment of Spanish eTrace and relevant
  training. Additionally, with funding from the U.S. State Department, Narcotics Affairs Section




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    Assistant Inspector General for Evaluation and Inspections
    Michael O. Gulledge

    (NAS), ATF will be providing 64 computers to Mexico; two for each of the 31 Mexican States
    and the Federal District. These computers will be dedicated for e-Trace to ensure that POR can
    successfully access Spanish e-Tr'8te to enter, monitor, and retrieve trace data for their recovered
    firearms. The A1F MeO, in conjunction with ATF International Training Branch and with
    funding from NAS, will provide Spanish e-Trace training for approximately 31 POR Delegados
    and their designees. Additionally. ATF's National Tracing Center wiU conduct periodic reviews
    orGOM e-Trace entries for completcnes::s and accuracy.

   12. Regularly and more effectively communicate ATF's Project Gunrunner strattgy to
   Muican law enforcement authormes, including the value ofgun tracing QlJd the successes
   involving In/omuzJion or tracln, in/onnation provided 6y Mexican agencies.

   ATF concurs. As ATF noted in our response to recommendation number II, efforts are
   underway to increase access and training for Mexico's Federal DeJegados and their POR staffs in
   all 31 Mexican Slates and the FederaJ District.

   The total number of authorized ATF positions in Mexico is now 18, and there are currently 8
   FSNs supporting ATF's work.. As discussed in response 10 recommendation number 7. AIF will
   establish and communicale the roles and responsibilities ofBLOs to affected SACs, designated
   specia1agents. and personnel assigned to applicable. COWltry offices. ATF's increased staffing
   and improvements to the BLO program will enhance the communications, responsiveness. and
   relationships between ATF and Mexican law enforcement officials, and promote increased
   understanding and support of A1F's Project Gunrunner, including the value of and successes
   resulting from tracing of firearms recovered in Mexico. To further cnhance A TF's capabilities in
   the U.S. Southwest Border region, and in recognition of ATF's ongoing significant commitment
   and priority on bilateraJ investigations of the criminal pOssession, trafficking, and use offirearms
   and explosives in MEOOCO, AlF will establish an ES·t" 11, Country Attache, in Mexico City.
                                                            8

   13. D~/op bdler in/ormation sharing and Intelligence analysis capability at Its Mccico
   Co.ntry OfJla.

   ATF concurs. As noted in ATF's response to recommendation ntoDber 12. to enhance ATF's
   overall capabilities in the U.S. Southwest Border region, and in recognition of A TF's ongoing
   sign1ficant comrtliunent and priority on bilateral investigations of the criminal possession,
   trafficking, and use of.6.reanns and explosives in Mexico, ATF wiU establish an ES·1811,
   CountJy Attache, in Mexico City.

   ATF's Attache in Mexico City will act as ATf's principal advisor to the Government on all
   matters relating to the control of illicit traffic in firearms and explosivcs in Mexico; represent




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    Assistant Inspector General for Evaluation and Inspections
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   ATF on the U.S. Ambassador's staffas an integral part of the U.S. Country Team within the host
   country; serve as principal advisor to the U.S. Ambassador on international firearms and
   explosives trafficking matters; plan. organi7..e. and oversee ATF programs in Mexico; conduct
   and support complex. multi·agcncy investigations involving international conspiracies; provide
   direction. leadership, and training to law enforcement agencies within the bost country; assist in
   persuading these agencies to assume greater responsibility in controlling illicit traffic; provide
   criminal investigative expertise and guidance to these agencies in support of their enforcement
   efforts; and provide direction on legislative changes required to develop adequate fireanns and
   explosives extradition treaties and other laws for the effective enforcement and control of illicit
   fireanns and explosives traffic.

   14. In coordination with the Mexico Attorney General's office, evaluate the mutual benefits,
   rolu, turd Information sharing protocols of tl.. Mexico Attorney General's office
   ""rosen/alive pilot program to tkt.,miJre whether to expand the program to each afATF's
   Southwest Bord., freld divisions.

   ATF concurs. In coordination with the Mexico Attorney General's office, ATF will evaluate the
   mutual benefits, roles, and information sharing protocols of the Mexico Attorney General's
   office representative pilot program to determine whether to expand the program to each of ATF's
   SouthweSt Border field divisions. ATF also offered CENAPI to place a representative at EPIC in
   ATF's Fireanns and Explosives Intelligence Team to improve the facilitation and sharing ofreal
  ·time actionable information as outlined in our response to recommendation 1.

   15. Ensur. /hal ~h. ,eforms discussed in A TF's S.plLmbtr 2010 "Project Gunrunner-A
   Cartel Focused Strate/fJI" orefrUly and expeditiously implemenled.

    ATF concurs. The Cartel Strategy document, a transmittal memorandum, and a series of
    PowerPoint slides containing N-Force screen shots related to enhanced coding insln1ctions for
    Southwest border and cartel-related investigations Were transmitted to all field special agents in
    charge and affected Field Operations headquarters division chiefs via e-mail on september 16,
    2010. The SACs were directed to review and intema!ly disseminate this material, and on
. . Scptember 23, 2010, the documents were posted to ATF Intraweb. These materials have been
    designated as the topic for mandatory roll call training for alilieid special agents in October
    2010.




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                                                   -13-

      Assistant Inspector General for Evaluation and Inspections
    . Michael D. Gulledge

     Should you bave any questions regarding this response, please contact Melanie Stinnett,
     Assistant Director, Office of Professional Responsibiliiy and Security Operations at (202)
     648-7500.

                                             Sincerely yours,




                                            Kenneth E. Melson
                                             Deputy Director




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           ATTACHMENT




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        PROJECT GUNRUNNER CASES AND DEFENDANTS RECOMMENDED FOR
                    PROSECUTION FY 2006 THROUGH FY 2009
                     (Judicial Status as of April 2009)                 Number
     Cases Reconunended for Prosecution                                              853
     Cases Accepted for Prosecution                                                  576
     Cases Declined                                                                  129
     Cases Pendin~ A Prosecutorial Decision                                          148
     Cases With Arrests                                                              617
     Cases With Indictments                                                          558
     Cases With Convictions                                                          422
     Cases With Sentencin~                                                           375
     Defendants Recommended for Prosecution                                        1,802
     Defendants Accepted for Prosecution                                           1,256
     Defendants Declined                                                             250
     Defendants Pending A Prosecutorial Decision                                     296
     Defendants Arrested                                                           1,306
     Defendants Indicted                                                           1,213
     Defendants Convicted                                                            841
     Defendants Sentenced to Prison                                                  608
     Total Prison Months Sentenced                                                56,943
     Average Defendants Sentence (In Months)                                          94
     Defendants Sentenced to Probation                                               198
     Total Probation Months Sentenced                                              8,115
     Average Probation Sentence (In Months)                                           41
     Fireanns Trafficking Cases Recommended for Prosecution                          429
     Fireanns Trafficking Cases as a Percent of All Cases Recommended               50%
     Fireanns Trafficking Defendant Recommended                                      789
     Firearms Trafficking Defendant Convicted                                        512
     Estimated Number of Guns Trafficked                                          13,481
     Gang Related Cases Recommended for Prosecution                                  260
     Gang Related Defendants Recommended for Prosecution                             777
     Gang Related Defendant Convicted                                                841
     Firearms Taken Into Evidence                                                  5,457
     Ammunition Taken Into Evidence                                              535,262




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      APPENDIX VI: OIG ANALYSIS OF THE BUREAU OF ALCOHOL, 

         TOBACCO, FIREARMS AND EXPLOSIVES’ RESPONSE 



      The Office of the Inspector General provided a draft of this report to
the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) for its
comment. ATF’s response is included in Appendix V to this report. The
OIG’s analysis of ATF’s response and the actions necessary to close the
recommendations are discussed below.

      In its response, ATF commented on several aspects of the review and
provided some new data pertaining to Project Gunrunner. Further,
although ATF concurred with all of our recommendations, the proposed
corrective actions in many cases did not adequately address how ATF would
implement the corrective action or address the deficiencies that the OIG
report identified in ATF’s implementation of Project Gunrunner.

      In this analysis, we first address the general comments in ATF’s
response, and then we provide our specific analysis of ATF’s response to
each recommendation.

Project Gunrunner Data

       In its response, ATF provided some new data regarding the
accomplishments it said it has achieved under Project Gunrunner from
FY 2006 through FY 2009. ATF provided data on defendants recommended
for prosecution, convicted, and the judicial outcomes; firearms and
ammunition in ATF evidence vaults; compliance inspections conducted; and
statistics on the actions and outcomes of those compliance inspections.
ATF also provided an attachment that contains data on 31 different Project
Gunrunner program elements.

     When we first received ATF’s response, we questioned ATF about
apparent errors in the new data, and ATF then provided some revised data.
The analysis in this appendix applies to ATF’s revised response.

       Notwithstanding ATF’s revisions, we still found significant portions of
ATF’s data to be questionable. After reviewing ATF’s methodology for
deriving the new statistics and obtaining clarification from ATF on its
Project Gunrunner data, we determined that the revised data still contained
many discrepancies that resulted in incorrect data being provided to the
OIG. Those discrepancies were caused by incomplete data in ATF’s N-Force
and N-Spect databases, inconsistent coding of work activities by ATF, errors
in ATF’s description of the data, unsupportable data entries by ATF, and
variations in the time frame covered by ATF’s data. Also, in some cases ATF


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included data in its analyses regarding activities that the OIG found to be of
limited value for assessing the effectiveness of Project Gunrunner.

       For example, we found that an ATF manager provided the OIG data in
which he had categorized hundreds of defendants as having been referred
for prosecution in state courts without knowing whether that information
was correct. Specifically, ATF stated in its response that, from FY 2006
through FY 2009, 1,256 defendants were recommended for prosecution in
federal, state, and local courts.102 However, when we examined the number
of defendants referred to each level of courts, using the same April 2010
ATF data set that ATF used, we found there were 1,110 defendants
recommended to federal, state, and local courts for prosecution. When we
asked ATF to explain this discrepancy, the Acting Chief of Staff responsible
for the data analysis stated that for 344 entries that had not been
designated as having been referred to either federal or state courts for
prosecution, he assigned all the entries the code “state,” despite no
information to verify this. We believe this significantly undermines the
validity of ATF’s data.

      Other examples where ATF’s data and its analyses of its data were
questionable include:

       	 Most of the numbers in the attachment to ATF’s comments were
          different from those previously provided by ATF to the OIG in
          response to our initial data request in April 2010, even though
          ATF’s response was described as being based on that same data.

       	 ATF stated in the response that 789 defendants, constituting
          63 percent of all defendants referred for prosecution, “faced
          charges related to firearms trafficking.” However, when we
          requested clarification, ATF stated that this number included all
          individuals charged in a case where firearms had been trafficked,
          even if firearms trafficking charges were not filed.

       	 The data provided by ATF lack any context to demonstrate how
          those accomplishments contributed to Project Gunrunner, or even
          to allow for a comparative analysis of trends over time.

     Moreover, it is important to note that throughout this review, we
encountered discrepancies between our analyses of ATF’s data and those
completed by ATF, which were caused by various factors, including

       102 Page 2 of ATF’s response describes the 1,256 defendants as having been

“recommended” for prosecution. However, the attachment accompanying ATF’s response
described the 1,256 defendants as having been “accepted” for prosecution. The second
designation is correct, and the description on page 2 of ATF’s response is incorrect.


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deficiencies in ATF’s data management system. We worked with ATF to
obtain clarification regarding these discrepancies and to make adjustments
to the report when appropriate. However, we did not make adjustments
based on the new data provided by ATF because the validity of that data
was questionable. The major cause of the inconsistent data is ATF’s lack of
a comprehensive data management system, and we are concerned that the
lack of reliable, consistent data hinders ATF’s ability to track and accurately
report on the performance of its programs.

Context of Project Gunrunner and ATF Interviews

      ATF also argued in its response that a review of Project Gunrunner
requires in-depth knowledge and understanding of the program’s context,
the available resources, and the limitations imposed on the program, and
that while the OIG review covered significant portions of the program, some
of these areas would have benefitted from a more comprehensive review. As
an example, ATF stated that the OIG did not conduct interviews of certain
senior ATF headquarters officials, which ATF asserted would have provided
an important historical perspective, put Project Gunrunner in its proper
context within ATF’s overall strategy, and conveyed ATF’s plans for the
program.

       In fact, during the course of our review, the OIG interviewed 64 ATF
officials, including the Deputy Assistant Director with responsibility for
Project Gunrunner; division and branch Chiefs at ATF headquarters;
Southwest border Special Agents in Charge, including the one now
appointed as the new Mexico Country Office Attaché at the Senior Executive
Service level; Assistant and Resident Special Agents in Charge; Directors of
Industry Operations; Group and Area supervisors; agents; Intelligence
Research Specialists; Industry Operations Investigators; and other field
personnel. Through these extensive interviews, we obtained both historical
perspective and a context for the implementation of Project Gunrunner from
those who are responsible for the hands-on execution of the program.

       In addition, throughout this review we repeatedly requested
information from ATF about the program’s plans – including revised policies,
documents, conferences, training, and other matters. These requests were
generally coordinated through ATF’s Office of Inspections at headquarters.
However, at no time during our review did ATF indicate that the officials it
now names in its response would be better suited to address our inquiries
or that we should interview them. Nor did ATF ever suggest at the entrance
conference or during the review that we should interview additional ATF
officials. Rather, during our review we were directed to the many officials
who we did interview. In short, we believe through our extensive interviews,
we obtained a clear understanding of the program, and ATF did not state


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specifically what these new individuals it named would have told us that
would have changed our findings.

Strategic Approach to Project Gunrunner

       ATF asserted that the existence of many documents referred to in the
report, including ATF’s September 2010 cartel strategy, “belied” the report’s
finding that ATF lacks a strategic approach to Project Gunrunner. We
disagree. First, we do not believe that the documents referred to in our
report demonstrate that ATF had a strategic approach to Project
Gunrunner. To assess the program’s overall strategy, we reviewed ATF’s
June 2007 Gunrunner strategy, its 2009 National Firearms Trafficking
Enforcement Strategy and Implementation Plan, the 2009 firearms
trafficking implementation plans of ATF’s Southwest border field divisions,
and ATF’s Mexico Country Office 2010 Operations Plan. We compared those
plans with the actual operations in the field. We found that these strategies
and plans did not effectively address U.S.-Mexico coordination, joint
operations and activities, or intelligence sharing between the Southwest
border field divisions and the Mexico Country Office.

       Further, the majority (20 of 33) of the Southwest border field division
agents, intelligence personnel, and supervisors we interviewed told us they
had never heard of ATF’s 2009 National Firearms Trafficking Enforcement
Strategy and Implementation Plan, or that they had heard of the Strategy or
Plan but believed they had no impact. We concluded that despite the
existence of these documents, the actual performance of ATF does not
reflect a strategic approach to combating firearms trafficking.

       With regard to the new September 2010 cartel strategy, that
document was issued very recently, after we had provided our report to ATF.
ATF’s response stated that, contrary to the OIG’s statement that ATF
developed the cartel strategy in response to the working draft of the OIG’s
report, ATF had developed the strategy over several months. Yet, we note
that despite our frequent contact with ATF officials during this review, no
one at ATF mentioned the development of the cartel strategy to the OIG
until after we provided our draft report to ATF on September 3, 2010.
During our review, we had corresponded with ATF headquarters personnel
in over 240 documented communications (e-mail, telephone, and in person)
through September 2010. The first time ATF mentioned the existence of its
new strategy was on September 13, 2010, in its technical comments to the
OIG’s September 3, 2010, draft report. On September 16, 2010, the OIG
asked ATF when the strategy was drafted, and ATF did not respond.

       Nevertheless, we included information about the September 2010
cartel strategy in our report. However, the September 2010 cartel strategy
does not adequately address how ATF will implement this strategy. Thus,

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we do not believe the fact that ATF has issued its September 2010 cartel
strategy undermines our conclusion that ATF still needs to improve its
implementation of Project Gunrunner in several key program areas. We also
believe, as stated in the report, that ATF’s development of an
implementation plan for its new cartel strategy – with defined goals, specific
actions, and resources – is essential to the success of the strategy and also
to ATF’s overall effort to combat firearms trafficking to Mexico.

Project Gunrunner Funding

        ATF’s response stated that the OIG failed to provide the full funding
context for Project Gunrunner’s implementation and that ATF did not
initially receive all the funding it needed to support the program. The
response stated that, as a result, ATF prioritized its limited resources to
achieve an immediate operational impact and deferred needed
administrative and intelligence support positions. ATF’s response also
stated that one might infer from the OIG’s report that ATF had full access to
unconstrained resources and that there are and were no challenges in
expanding Project Gunrunner.

      We recognize the significant challenges, including limitations on
funding and personnel that ATF has faced in supporting and expanding
Project Gunrunner. The Background section of our report describes how
ATF created Project Gunrunner and states that the initiative did not have
dedicated funding within ATF’s budget until FY 2009.

       However, many of our findings pertain to needed improvements within
ATF’s existing program areas that are unrelated to these funding challenges
and are not attributable to hiring, transferring, and training personnel using
new resources. For example, ATF needs more systematic, regular
exchanges of strategic intelligence with its partner agencies; guidelines for
Field Intelligence Groups in generating investigative leads; procedures for
intelligence personnel to routinely exchange information; and a method for
intelligence personnel to regularly share analytical techniques and best
practices. These are not predominantly personnel or resource issues.
Further, dedicated funding is not required to establish a position
description for border liaisons, to focus on more complex conspiracy cases
against traffickers, to make greater use of the OCDETF Program, or to
provide guidance for better coordination with ICE on firearms trafficking
along the Southwest border.
Scope of Project Gunrunner

      ATF stated that the report does not reflect the complete purpose of
Project Gunrunner and focuses only on the firearms trafficking elements of
the program, excluding the purpose of reducing the high level of violence
associated with cross-border drug and firearms trafficking. Specifically, ATF

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cited our discussion in Parts II and III of the report regarding single
defendant versus complex cases, and the comparative penalties received for
drug trafficking cases versus firearms trafficking cases, as not addressing
the work ATF has undertaken to reduce violent crime.

       We disagree that the report does not acknowledge that Project
Gunrunner also seeks to reduce violent crime along the border. At the same
time, stemming the flow of guns into Mexico is integral to Project
Gunrunner’s mission, and the main purpose of our review was to examine
ATF’s implementation of the Project Gunrunner mission to reduce firearms
trafficking to Mexico.

      However, in Part I of the report we present our analysis of seven
categories of ATF data that illustrate the program’s performance, using
ATF’s own definition of a “Project Gunrunner case” as one that involves
firearms trafficking or violent crime with a nexus to the Southwest border.
Moreover, because our analysis included all ATF investigations designated
as Project Gunrunner cases, we did include those related to violent crime, to
the extent they exist.

       Our findings in Part II of the report are based on our detailed
examination of intelligence and information sharing under Project
Gunrunner, internal ATF coordination, and ATF’s coordination with
Mexican and U.S. partner agencies. Although we describe this as
intelligence and information pertaining to firearms trafficking to Mexico, we
did not find any distinctions between that and other types of intelligence
pertaining to associated violent crime. Further, both ATF field personnel
and U.S. and Mexican agency officials we interviewed specified that more
intelligence and information on firearms trafficking to Mexico was needed.

       Also, contrary to ATF’s statement, our findings in Part III of the report
were based on the broader “Project Gunrunner case” data, which included
the associated violent crime. We also recognize that ATF has undertaken
significant work, including single defendant cases, to attempt to reduce
violent crime. However, as our analysis shows, these actions have not
resulted in the targeting of higher-level firearms traffickers, smugglers, and
recipients.

Intelligence Cases

      ATF’s response stated that our report evaluated the number of
criminal cases initiated under Project Gunrunner but did not address the
many intelligence cases (intelligence files) ATF developed in support of the
program to document gun seizures in Mexico and leads developed in the



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United States.103 ATF stated that it believes this omission understates its
proactive efforts in addressing the intelligence requirements of Project
Gunrunner.

       In our discussion of ATF’s performance measures under Project
Gunrunner, we did not include in our analysis of the number of criminal
investigations (cases) initiated by ATF the 2,271 intelligence files that ATF
opened. In fact, as ATF’s response acknowledges, the intelligence files to
which ATF is referring were derived from open source seizure information in
Mexico. Most (97 percent) involved ATF personnel at EPIC translating
Spanish language newspaper articles into English and entering the
information into N-Force. Such information, together with gun trace and
descriptive information surrounding a seizure, may provide the foundation
for future investigative leads and may result in the initiation of Project
Gunrunner cases. However if that happened, the intelligence file is
converted into a criminal case and would be included in our analysis. The
intelligence files cited by ATF have, by definition, not had such a result.

       We agree that monitoring open source information is proactive
intelligence work, but we do not believe that it should be counted as the
equivalent of a criminal investigation or that it represents a major outcome
for ATF’s Project Gunrunner. We believe that including such data as ATF
suggests would be misleading as an indicator of Project Gunrunner’s impact
on the initiation of investigative cases, and we have not done so.

Challenges Facing the U.S. and Mexican Governments

       ATF’s response stated that ATF is concerned that the OIG’s review
does not adequately reflect the challenges that the U.S. and Mexican
governments face in trying to reduce violence and gun and drug trafficking
along and across the Southwest border. ATF noted that there have been
significant challenges, given the difference between the U.S. and Mexican
legal systems, the investigative capabilities and resources, and the culture
and laws relating to firearms possession. ATF stated that it is currently
operating in an unprecedented capacity in Mexico and that it provides more
assistance regarding firearms trafficking and explosives investigations than
ever before.

       We agree that ATF and other U.S. agencies face significant challenges
in trying to reduce violence, gun trafficking, and drug trafficking along and
across the border. In our report, we explain that these challenges are
compounded by the many differences between Mexico’s government

        103 Although ATF’s response refers to intelligence “cases,” they are not cases in the

traditional sense of a criminal investigation. We refer to them as intelligence files, which we
believe is a more accurate description.


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structure and that of the United States. We carefully considered these
issues when drafting the report findings and recommendations. Where
applicable we augmented the report to include ATF’s comments on these
challenges. Further, our report acknowledges ATF’s assistance and training
efforts in Mexico.

      Nonetheless, our review evaluated ATF’s implementation of Project
Gunrunner in the face of these challenges. In some cases, the causes of the
problems are outside of ATF’s control and occur within the context of
broader cross-governmental challenges. Yet, as described in the report, we
believe that many deficiencies related to the implementation of Project
Gunrunner are within ATF’s control and that ATF should take aggressive
action to implement improvements.

ATF’s September 2010 Cartel Strategy

      Finally, ATF stated that its new September 2010 cartel strategy
addresses most of our recommendations. Although ATF concurred with
each of our recommendations and provided specific responses to them, ATF
stated that the OIG should note that it had already addressed many of the
recommendations.

      As noted above, we reviewed ATF’s September 2010 cartel strategy
and incorporated elements of it into applicable portions of the report. We
also believe that the strategy recognizes and reinforces many of our key
findings.

        More important, dissemination of the strategy does not in itself ensure
its effective implementation throughout ATF. As our report noted, the
strategy does not provide detailed information on how ATF will implement
and monitor efforts to improve operations in the key areas identified in the
strategy. As we also describe in our responses to the specific
recommendations below, we believe ATF’s development of an
implementation plan – with defined goals, specific actions, and resources –
is essential to the successful implementation of improvements discussed in
the September 2010 cartel strategy and also to ATF’s overall effort to combat
firearms trafficking to Mexico.

 OIG’S ANALYSIS OF ATF’S RESPONSE TO EACH RECOMMENDATION

Recommendation 1. Coordinate with the government of Mexico, the CBP,
DEA, and ICE to ensure systematic and regular exchanges of strategic
intelligence to combat firearms trafficking to Mexico.

       Status. Resolved – open.


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       Summary of ATF Response. ATF concurred with our
recommendation. ATF stated that it has been and will continue to evaluate
and refine protocols for sharing strategic intelligence with its partner
agencies. It listed several examples, including recently initiated meetings
with ICE and the CBP by ATF’s National Gunrunner Coordinator and the
Office of Strategic Intelligence and Information. Other examples included
two additional roles played by the National Gunrunner Coordinator that
involve coordinating with other federal law enforcement agencies. ATF also
referred to an October 2010 Mexico and U.S. conference co-chaired by ATF’s
Deputy Director and CENAPI’s Director that focused on dismantling the
tools of transnational crime. ATF stated that this meeting resulted in ATF
agreeing to accelerate eTrace training, ATF inviting CENAPI to join its unit
at EPIC, and ATF agreeing to provide regular intelligence bulletins
containing aggregated gun trace and investigative information. ATF stated
that it is encouraging Mexican law enforcement officials to make use of its
expertise through the Combined Explosives Investigations Team.

      OIG Analysis. The actions planned by ATF are partially responsive to
the recommendation, and ATF has taken some actions to improve
coordination with its partner agencies. However, we believe that the actions
ATF described will not fully ensure systematic and regular exchanges of
strategic intelligence with all of its partner agencies.

       Regarding ATF’s exchange of strategic intelligence with Mexican law
enforcement, we believe the regular sharing of ATF’s recently developed
intelligence bulletins with CENAPI can improve the exchange of strategic
intelligence between both agencies. The agreements made at the
October 2010 bilateral meeting can help ATF establish a foundation to
improve the regular exchange of strategic intelligence with Mexican officials.
The assignment of a CENAPI representative to EPIC can also improve
information sharing, but the roles and information sharing responsibilities
for this position have not been defined, and the position has not been filled
as of October 2010. In addition, ATF’s agreement to accelerate eTrace
training and ATF’s encouraging Mexican officials to make use of the
Combined Explosives Investigations Team is a positive development, but
ATF’s response does not indicate how it will ensure systematic and regular
exchanges of strategic intelligence between ATF and the government of
Mexico.

       By February 15, 2011, please provide (a) copies of all newly developed
intelligence bulletins disseminated to Mexican officials between October 31,
2010, and January 31, 2011, and (b) a list of all recipients of these
intelligence bulletins.

      Regarding ATF’s exchange of strategic intelligence with the CBP and
ICE, we believe that the meetings between ATF and those agencies also can

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improve the exchange of strategic intelligence. Our review found that ICE,
an agency with a parallel mission to ATF’s of combating firearms trafficking
to Mexico, would benefit from receiving the same strategic intelligence
products that ATF field agents told us are useful, including those produced
by the Office of Strategic Intelligence and Information’s Southwest Border
Field Intelligence Support Team, the Violent Crime Analysis Branch, and
other ATF intelligence entities. However, ATF’s response did not indicate
how these meetings would be used to promote the regular exchange of such
strategic intelligence or whether information exchange protocols were
established at the meetings that have already been held. In addition, while
ATF described a coordination meeting scheduled in San Diego in October
2010, ATF did not indicate whether additional meetings would occur.

      By February 15, 2011, please provide (a) a list of the meetings held
between October 31, 2010, and January 31, 2011, (b) copies of the meeting
agendas, (c) a list of the attendees at each of the meetings, and (d) a
description of the information exchanged or agreed to be exchanged.

       ATF’s response did not mention the DEA. During our review, we
found that the systematic and regular exchange of strategic intelligence was
not occurring between ATF and the DEA, despite officials from both agencies
recognizing that such intelligence sharing is beneficial to their missions. As
stated in the report, the DEA has a significant amount of strategic
intelligence on drug cartels that ATF officials stated would benefit Project
Gunrunner, especially in the cartel-focused strategy that ATF will be
adopting pursuant to its new emphasis on larger cases tied to specific drug
cartels.

      By February 15, 2011, please provide a detailed description of ATF’s
establishment of regular exchanges of strategic intelligence with the DEA,
including (a) a list of any meetings held between October 31, 2010, and
January 31, 2011, or the dates of any planned meetings, (b) copies of the
meeting agendas, (c) a list of the attendees at each of the meetings, and (d) a
description of the information exchanged or agreed to be exchanged.

Recommendation 2. Work with the Department to explore options for
seeking a requirement for reporting multiple sales of long guns.

       Status. Resolved – open.

      Summary of ATF Response. ATF concurred with this
recommendation, but noted that it may require a change to the Gun Control
Act, which is beyond ATF’s and the Department’s authority. ATF stated that
it would explore the full range of options to seek information regarding
multiple sales of long guns.


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     OIG Analysis. The actions planned by ATF are responsive to our
recommendation. Although some of the options for addressing this issue
would require legislation, responsive actions may be possible within the
authority already legally granted to ATF.

      By February 15, 2011, please provide the OIG with an update on the
options considered and the results obtained for improving ATF’s oversight of
multiple sales of long guns.

Recommendation 3. Ensure that each Southwest border firearms
trafficking enforcement group develops and regularly updates general
guidelines for their Field Intelligence Group to follow that specify the most
useful types of investigative leads.

       Status. Unresolved – open.

       Summary of ATF Response. ATF concurred with this
recommendation. ATF stated that it has communicated and will continue to
reinforce guidance previously provided to Field Intelligence Groups through
the Southwest Border Collection Plan, the Field Intelligence Group
Supervisor’s Guide Book, national training conferences, and policy
documents. ATF stated that these materials and training include guidance
on coordination between Field Intelligence Groups and the respective field
offices in the development of local guidelines for the referral of investigative
leads. ATF said that a firearms trafficking coordinator from each division
attended the August 2010 Field Intelligence Group national training
conference in Washington, D.C. ATF also stated that it recently (August
2010) initiated an effort to update its firearms trafficking indicators, which
would support the enhancement of referrals generated from compliance
inspections. In addition, ATF stated that it has scheduled a Project
Gunrunner coordination conference at EPIC in December 2010 for various
field personnel, including those with Gunrunner groups.

       OIG Analysis. We believe that the actions planned by ATF are not
responsive to the recommendation. Although ATF concurred with the
recommendation, the actions it described do not provide sufficient details
regarding how firearms trafficking enforcement groups will develop and
regularly update general guidelines for their Field Intelligence Groups. Our
review found that despite the existence of the documents cited by ATF’s
response, ATF did not have minimum national standards for Field
Intelligence Groups to use in determining which leads to forward to agents.
We found that the Field Intelligence Groups in the four Southwest border
field divisions varied in their development of localized standards for
screening potential leads, and many of the local standards were not useful
to agents. Further, the Southwest Border Collection Plan and the Field
Intelligence Group Supervisor’s Guide Book are broader scoped documents

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that do not provide specific guidance tailored to the needs of each
enforcement group.

       Regarding the conferences that ATF reported it has conducted or will
conduct, ATF did not indicate whether Field Intelligence Group guidelines
were, or will be, discussed at those conferences. Also, we question whether
the attendees at these conferences are the appropriate individuals to
identify and update guidelines specific to each of the firearms trafficking
enforcement groups. Further, any updated firearms trafficking and straw
purchasing indicators may enhance referrals generated from compliance
inspections but will not assist Field Intelligence Groups in screening
investigative leads.

       By February 15, 2011, please provide the OIG with copies of
guidelines developed or updated by each Southwest border firearms
trafficking enforcement group.

Recommendation 4. Develop an automated process that enables ATF
managers to track and evaluate the usefulness of investigative leads
provided to firearms trafficking enforcement groups.

       Status. Resolved – open.

       Summary of ATF Response. ATF concurred with this
recommendation. ATF stated that it had awarded a contract to begin
business process reengineering of its case management and related
business processes in September 2010. ATF stated that the reengineering
project will examine the flow of information throughout ATF, including
referrals of information and investigative leads. The reengineering project
will also address the need for better integration between ATF’s case
management systems and its firearms information systems and assist ATF
in developing the best technical solution. ATF stated that it expects
completion of the reengineering project by mid FY 2012, although ATF does
not contemplate identifying, acquiring, and implementing an automated
solution to resolve this recommendation before FY 2014. ATF stated that in
the interim it will assess existing guidance regarding the “manual” exchange
and documentation of referrals between industry operations, Field
Intelligence Groups, and criminal enforcement field offices. If opportunities
for increased efficiency and effectiveness are identified, ATF will issue
revised guidance to field personnel.

       OIG Analysis. The actions planned by ATF are partially responsive to
the recommendation. We recognize that the business process reengineering
will not be complete until mid FY 2012 and that identification of the best
technical solution may not occur before FY 2014 and is dependent upon
adequate funding. However, ATF’s interim plan to assess existing guidance

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on the “manual” exchange and documentation of referrals between industry
operations, Field Intelligence Groups, and criminal enforcement field offices
did not include any details on how it would accomplish this assessment,
such as whether ATF would collect and disseminate best practices across
field divisions, or any timeline for accomplishments.

       By February 15, 2011, please provide the OIG with (a) the timeline
and scope of work to be performed in the business process reengineering;
(b) the results of ATF’s assessment of the “manual” exchange and
documentation of referrals between industry operations, Field Intelligence
Groups, and criminal enforcement field offices; and (c) a list of the
improvements to be implemented.

Recommendation 5. Develop and implement procedures for Southwest
border intelligence personnel to routinely exchange intelligence-related
information in accordance with ATF Order 3700.2A and the Intelligence
Collection Plan.

       Status. Unresolved – open.

      Summary of ATF Response. ATF concurred with this
recommendation. ATF referred to its response to Recommendation 1 and
stated that it has and will continue to ensure systematic exchanges of
information. ATF stated that it will also further review ATF Order 3700.2A
for potential revisions responsive to the OIG’s recommendations.

       OIG Analysis. We believe the actions identified by ATF are not
responsive to the recommendation. Although ATF concurred with the
recommendation, it stated only that it “has been and will continue to ensure
systematic exchanges of information.” Our review found that there was not
systematic exchange of information between Southwest border intelligence
personnel below the supervisory level. Further, the OIG’s review did not
identify deficiencies in the guidance contained in Order 3700.2A, and it is
unclear how revising this document would fulfill the need for Southwest
border intelligence personnel to routinely exchange intelligence-related
information. Regarding the information in ATF’s response to
Recommendation 1, those actions address ATF’s sharing of strategic
intelligence with Mexican and U.S. partner agencies, not procedures for
internally exchanging information among Southwest border intelligence
personnel.

      By February 15, 2011, please provide the OIG with copies of the
information exchange procedures issued by ATF or a status report on their
development.



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Recommendation 6. Develop a method for Southwest border intelligence
personnel to regularly share analytical techniques and best practices
pertaining to Project Gunrunner.

       Status. Unresolved – open.

       Summary of ATF Response. ATF concurred with this
recommendation. ATF stated that it has taken and will continue to take
steps to improve in this area as noted in its responses to Recommendations
3 and 5. In addition, ATF stated that Field Intelligence Group personnel
participate in periodic conference calls involving their respective Field
Intelligence Support Teams and regional Field Intelligence Groups during
which analytical techniques and best practices may be discussed. ATF
noted that it has a Field Intelligence Support Team dedicated to the
Southwest border field divisions.

       OIG Analysis. The information provided by ATF is not responsive to
the recommendation because it only indicates that ATF will continue
operating as it has in the past. As described in Part II of this report, we
found that ATF’s current processes have not ensured that Southwest border
intelligence personnel regularly share analytical techniques and best
practices and that the conference calls with Field Intelligence Group
personnel were limited to supervisors. Regarding the August 2010 Field
Intelligence Group conference and a planned December 2010 Project
Gunrunner coordinator conference, ATF did not indicate whether these
conferences covered the topics of sharing analytical techniques and best
practices. ATF also did not indicate in its response whether the conference
calls it described would serve as the method for sharing analytical
techniques and best practices pertaining to Project Gunrunner.

      By February 15, 2011, please provide (a) the topics covered in the
conference calls, (b) documentation of the Field Intelligence Group non-
supervisory intelligence personnel who participate in the aforementioned
periodic conference calls, (c) the dates of the calls, (d) whether the
conferences ATF referred to in its response to Recommendation 3 included
analytical techniques and best practices, and (e) a description of any other
methods used to facilitate the regular sharing of analytical techniques and
best practices between Southwest border intelligence personnel.

Recommendation 7. Formalize a position description that establishes
minimum expectations regarding the roles and responsibilities of border
liaisons.

       Status. Resolved – open.




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       Summary of ATF Response. ATF concurred with the
recommendation to provide a more detailed description of the roles and
responsibilities of border liaisons, but stated that it did not believe that a
unique position description is necessary. ATF noted that the general duties
and roles of the border liaisons were addressed within ATF’s September
2010 cartel strategy. ATF stated that it will further document the roles and
responsibilities of border liaisons in an ATF order addressing international
operations. ATF described the details that the planned order will include,
such as qualifications; selection; role, responsibilities, and authorities; area
of responsibility; coordination with and between the field division and the
respective country office; training and development; and administrative
matters such as passports, country clearances, expenses and equipment.

      OIG Analysis. The actions planned by ATF are responsive to our
recommendation. By February 15, 2011, please provide the OIG with a
copy of the ATF order, or a status report on its development.

Recommendation 8. Focus on developing more complex conspiracy cases
against higher level gun traffickers and gun trafficking conspirators.

       Status. Unresolved – open.

       Summary of ATF Response. ATF concurred with this
recommendation, adding that it “has and will continue to” develop complex
conspiracy cases. ATF stated it will reinforce its National Firearms
Trafficking Enforcement Strategy and Implementation Plan, as well as its
September 2010 cartel strategy. It also stated that it is working with the
Department, the Criminal Division, and the USAOs to bring agents and
prosecutors from Mexico and the United States together to work on
enhancing this effort. Additionally, in its response to Recommendation 9
below, ATF stated it has prioritized complex investigations related to
firearms trafficking during monthly management conference calls and other
venues.

       OIG Analysis. The actions planned by ATF are partially responsive to
the recommendation. ATF’s plan to work with the Department, Criminal
Division, and the USAOs to improve the focus of its investigations is
responsive to the recommendation. However, ATF’s statement that it “has
and will continue to develop complex conspiracy cases” ignores the data and
other information we developed in this review demonstrating that ATF has
not sufficiently focused on multi-defendant cases that target higher-level
traffickers. Also, ATF’s September 2010 cartel strategy recognizes the need
for increased emphasis on “targeting the persons with greater responsibility
for the trafficking schemes” by attempting to “conduct investigations
focusing greater attention on the cartels that finance and direct these
trafficking operations.”

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       By February 15, 2011, please provide specific information regarding
the efforts to emphasize complex conspiracy cases in accordance with the
September 2010 cartel strategy.

Recommendation 9. Send guidance to field management, agents, and
intelligence staff encouraging them to participate in and exploit the
resources and tools of the OCDETF Program, as directed in the Deputy
Attorney General’s cartel strategy.

       Status. Resolved – open.

       Summary of ATF Response. ATF concurred with this
recommendation. ATF stated that in addition to prioritizing multi-defendant
complex investigations related to Southwest border firearms trafficking and
violence during its monthly management conference calls, meetings, and
other venues, its September 2010 cartel strategy highlights increased
participation in the OCDETF Program. ATF also stated that it will develop a
mandatory roll call training package related to the OCDETF Program for all
field agents. ATF stated that after the April 2009 memorandum from the
OCDETF Program Director on the eligibility of firearms trafficking cases with
a nexus to Mexican [cartels], ATF communicated guidance to the field on
September 15, 2009, regarding increased emphasis on the OCDETF
Program. ATF noted that prior to the April 2009 memorandum, its efforts to
utilize the OCDETF Program for these types of cases frequently met negative
results if Title 21 (drug-related) violations, targets, and agencies with
Title 21 authority were not involved. ATF stated that its participation in the
OCDETF Program has been increasing, that its participation is substantial
in relation to the OCDETF funding that it receives, that it dedicates more
resources to the OCDETF Program than it receives funding for, and that in
2010 its OCDETF funding increased. ATF also plans to co-locate new
Gunrunner groups with El Paso and Atlanta OCDETF task forces.

       OIG Analysis. The actions planned by ATF are partially responsive to
the recommendation. Like ATF’s June 2007 Gunrunner strategy, the
September 2010 cartel strategy is an affirmation of the importance of using
the OCDETF Program. Regarding ATF’s statement on the April 2009
OCDETF Director’s memorandum, our report states that ATF told us that
firearms trafficking investigations with no significant drug trafficking nexus
were frequently refused by the OCDETF Program. We also found that even
after the April 2009 guidance was issued, ATF underutilized the OCDETF
Program for several reasons, including a focus on fast investigations,
misunderstandings about the program, and low numbers of ATF staff
assigned to OCDETF task forces.




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      By February 15, 2011, please provide (a) a copy of the roll call training
package on the OCDETF Program; (b) the September 15, 2009,
memorandum to field staff regarding increased emphasis on the OCDETF
Program; (c) a status report on ATF’s plans to co-locate new Gunrunner
groups with El Paso and Atlanta OCDETF task forces; and (d) information
on how ATF plans to monitor the field divisions’ use of the OCDETF
Program.

Recommendation 10. Provide guidance to ATF field supervisors and
agents to better coordinate with ICE, including direction on how to
“coordinate all pertinent and necessary information” in areas of “concurrent
jurisdiction,” as defined in the memorandum of understanding.

       Status. Unresolved – open.

      Summary of ATF Response. ATF concurred with this
recommendation and stated that it is implementing the recommendation as
discussed in its responses to Recommendations 3, 4, 5, 6, 8, and 9. ATF’s
response also provided excerpts from a document sent by ICE to the OIG in
October 2010 that described collaborative investigative efforts between ATF
and ICE during June 2009 and September 2010. That document described
113 joint ATF/ICE collaborative efforts, 37 of which ICE stated specifically
address the trafficking of weapons, explosives, ammunition, and
components from the United States into Mexico. The document provided
some statistics on the results of these cases, including 119 arrests and 756
firearms seized, and a statement that ICE and ATF “have undoubtedly
proven a strong willingness and a proactive approach to integrating efforts
that address existing shortcomings to enhance the U.S. government’s ability
to identify and target those who violate our weapon related laws.”

      OIG Analysis. The information provided by ATF is not responsive to
the recommendation. ATF did not indicate that it has provided, or plans to
provide, guidance to field supervisors and agents regarding coordination
with ICE. Our review found that many field supervisors and agents from
both ICE and ATF do not coordinate with each other, as required, and do
not understand the contents of the memorandum of understanding signed
by the two agencies over a year ago.

       Regarding the information that ICE provided to the OIG on its 113
joint collaborative efforts with ATF, ICE described only 37 (33 percent) as
related to firearms trafficking to Mexico. Although we noted an increase in
ATF/ICE joint investigations in our report, we found that 105 of 1,800
(6 percent) Project Gunrunner cases between FY 2007 and FY 2009 were
joint ATF/ICE investigations. These numbers, in our view, do not show “a
strong willingness and proactive approach to integrating efforts,” as stated
by ICE.

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       By February 15, 2011, please provide a copy of the guidance issued to
field supervisors and agents implementing the memorandum of
understanding’s provisions for coordination with ICE.

Recommendation 11. Work with the government of Mexico to determine
the causes of unsuccessful traces and develop actions to improve the rate of
successful traces.

       Status. Resolved – open.

      Summary of ATF Response. ATF concurred with this
recommendation. ATF stated that it has and will continue to work with the
government of Mexico to increase the rate of successful traces through
comprehensive Spanish eTrace deployment and relevant training. In
addition, ATF stated that it will use funding from the Department of State’s
Narcotics Affairs Section to provide 64 computers to Mexico – 2 for each of
the PGR offices located in 31 Mexican states and the Federal District – to
ensure that PGR can successfully access Spanish eTrace to enter, monitor,
and retrieve trace data for its recovered firearms. ATF also stated that it will
provide training to PGR officials on Spanish eTrace and that ATF’s National
Tracing Center will conduct periodic reviews of Mexican eTrace entries for
completeness and accuracy.

       OIG Analysis. The actions planned by ATF are responsive to the
recommendation. By February 15, 2011, please provide (a) copies of the
training agenda provided to Mexican law enforcement, (b) the frequency of
the National Tracing Center’s planned periodic reviews of Mexican eTrace
entries, and (c) how ATF will use the results of these reviews to improve the
rate of successful traces.

Recommendation 12. Regularly and more effectively communicate ATF’s
Project Gunrunner strategy to Mexican law enforcement authorities,
including the value of gun tracing and the successes involving information
or tracing information provided by Mexican agencies.

       Status. Resolved – open.

       Summary of ATF Response. ATF concurred with this
recommendation and repeated that it plans to increase eTrace access and
training to Mexican law enforcement. ATF also stated that it will increase
its positions in Mexico to 18 ATF positions and 8 Foreign Service Nationals,
as well as establish and communicate the roles and responsibilities of
border liaisons. ATF stated that this will enhance the communications,
responsiveness, and relationships between ATF and Mexican law
enforcement officials, and promote increased understanding and support of
ATF's Project Gunrunner, including the value of and successes resulting
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from tracing of firearms recovered in Mexico. ATF also stated that it will
establish a Country Attaché position at the Senior Executive Service level to
further enhance its capabilities in the U.S. Southwest border region.

       OIG Analysis. The actions planned by ATF are partially responsive to
the recommendation. Although more staff can make it easier for ATF to
convey the value of firearms tracing to Mexican law enforcement, to
effectively respond to this issue ATF should develop a more defined
approach that includes regularly informing Mexican law enforcement when
a gun trace results in an investigation and when a trace leads to a
successful prosecution.

      By February 15, 2011, please provide (a) a description of ATF’s plan to
regularly convey to Mexican law enforcement authorities its overall Project
Gunrunner strategy, including the value of gun tracing and the successes
involving information or tracing information provided by Mexican agencies;
and (b) what specifically has been communicated to Mexican authorities and
through which venues.

Recommendation 13. Develop better information sharing and intelligence
analysis capability at its Mexico Country Office.

       Status. Unresolved – open.

      Summary of ATF Response. In its response, ATF concurred with the
recommendation and stated that it will establish a Country Attaché position
at the Senior Executive Service level to further enhance its capabilities in
the U.S. Southwest border region and in recognition of ATF’s commitment to
impeding firearms trafficking to Mexico. ATF stated that the Attaché’s
duties will include serving as ATF’s principal adviser to the government of
Mexico and the U.S. Ambassador; planning, organizing, and overseeing ATF
programs in Mexico; conducting and supporting complex, multi-agency
investigations involving international conspiracies; and persuading Mexican
agencies to increase efforts on firearms trafficking.

       OIG Analysis. The actions planned by ATF are not responsive to the
recommendation. Although the Country Attaché and the increased staff
that ATF described in its response to Recommendation 12 may enhance
capabilities at its Mexico Country Office, these actions do not address how
ATF will improve information sharing and intelligence analysis. Our report
found that the Mexico Country Office lacks a sufficient capability to collect,
analyze, and disseminate all available intelligence to support firearms
trafficking investigations. Specifically, we found that the small staff in ATF’s
Mexico Country Office is unable to respond to all seizures and keep up with
the analysis of intelligence and information. Enhancing its information
sharing and intelligence analysis capability should allow the Mexico Country

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Office to achieve its strategic goal of improving coordination,
communication, and information sharing on firearms seizures between
U.S. and Mexican agencies.

       By February 15, 2011, please describe (a) what specific actions ATF
will take to improve information sharing and intelligence analysis capability
at the Mexico Country Office and (b) how ATF will measure its
improvements.

Recommendation 14. In coordination with the Mexico Attorney General’s
office, evaluate the mutual benefits, roles, and information sharing protocols
of the Mexico Attorney General’s office representative pilot program to
determine whether to expand the program to each of ATF’s Southwest
border field divisions.

       Status. Resolved – open.

       Summary of ATF Response. ATF concurred with this
recommendation and agreed to evaluate the pilot program and to determine
whether to expand it. As in its response to Recommendation 1, ATF stated
that it has invited CENAPI to send a representative to ATF’s Firearms and
Explosives Intelligence Team at EPIC to improve information sharing on
investigations.

       OIG Analysis. The actions planned by ATF are responsive to the
recommendation. A representative from CENAPI at the Firearms and
Explosives Intelligence Team at EPIC will further support the objective of
this recommendation.

      By February 15, 2011, please provide the OIG with a copy of the
assessment of the pilot program, conducted in coordination with the Mexico
Attorney General’s office, or a status report on its development.

Recommendation 15. Ensure that the reforms discussed in ATF’s
September 2010 document entitled “Project Gunrunner – A Cartel Focused
Strategy” are fully and expeditiously implemented.

       Status. Unresolved – open.

      Summary of ATF Response. ATF concurred with this
recommendation and stated that it disseminated to the field its September
2010 cartel strategy, a transmittal memorandum, and a series of slides with
N-Force screen shots related to enhanced coding for Southwest border
investigations. ATF stated that it posted these documents to its Intranet on
September 23, 2010. ATF also stated that the strategy would be part of the
mandatory roll call training for all field agents in October 2010.

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       OIG Analysis. The actions planned by ATF are not responsive to the
recommendation. Although ATF has created and disseminated the new
cartel strategy to the field and plans to conduct roll call training for all field
agents on the new cartel strategy, ATF did not indicate that it will create a
detailed implementation plan or specific performance measures to ensure
that the new strategy is fully and expeditiously implemented. The
implementation plan and performance measures should address all of the
areas outlined in the 2010 strategy and provide defined goals, specific
actions, resources, and all other elements needed to ensure the strategy is
executed through Project Gunrunner operations.

     By February 15, 2011, please provide a copy of the full
implementation plan or the performance measures ATF has established.




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